Business Leaders Must De-Code New C-Suite Titles To Assure Oversight

It’s increasingly understood that executive offices are evolving in order to meet external challenges, uncertainties and requirements. And it’s also understood that such evolution includes adding new executive positions with titles, responsibilities and specialization beyond those traditionally associated with the “C-Suite”. But what’s less understood is the need to educate the board of directors on the rationale for these new positions, so that it’s better able to monitor their performance.

Important new reports from the consulting firm Deloitte, and the Society for Human Resources Management, underscore this challenge for corporate leadership. Both reports address how forces such as globalization, e-commerce, advanced technology and diversity are driving demand for additional executive level specialization. And they also raise questions about assuring the sustainability of these larger C-Suite structures.

You’ve probably heard of many of the new executive roles, as they range in novelty from the chief ecosystem officer, the chief events officer and the chief freelance relationships officer; to the chief learning officer, the chief product officer and the chief process officer; to the chief restructuring officer, the chief services officer and the chief solutions officer…and more!

And don’t forget the dual-titling trend, which is leading to such combined titles as chief financial officer/chief operating officer; chief financial officer/chief accounting officer; chief legal officer/chief human resources officer and chief technology officer/chief innovation officer.

That’s not to suggest that the new titles aren’t necessary. It is, rather, to acknowledge their unfamiliarity. Many of new executive leadership titles barely existed a few years ago, and expanded skill sets are increasingly expected of senior executives serving in traditional positions. It’s transformation requiring substantial re-orientation of C-Suite structures, and with significant implications for the board of directors. The rationale for the new positions needs to be made clear so that the board can effectively engage with the executive team. And that can be seen in at least four different ways:

What Does This Person Do? In order to properly perform its management oversight duties, the board should have a strong sense of the respective roles of senior executives. With traditional job titles, that’s no problem. But with the new wave of titles, it’s more of a challenge. Working with the CEO, the board should educate itself on the duties and responsibilities of the new corporate officer positions. It’s a critical step; directors can’t supervise senior management if they don’t know what senior management is hired to do.

What’s the Reporting Relationship? Of course, senior executives have a primary reporting relationship to the CEO. But their roles may also include a dual reporting relationship to the board (e.g., the CLO and the CFO) as well as reporting relationships to various board committees. With the proliferation of “new wave” executives, the board has an interest in confirming whether existing reporting relationships still work to update the board and its key committees. The board will also be interested in the ability of the CEO to manage the growing collection of executives.

Coordination and Collaboration. The board will also be interested in how the new positions link together, as a talent development matter. What’s the potential for overlap, repetition, confusion and lack of coordination from the proliferation of executive positions? Not all of them will feature truly unique responsibilities. How will this all be coordinated? Sure, it’s ultimately the CEO’s responsibility to make it work, but it’s also the board’s responsibility to make sure that it does.

What Are We Trying to Accomplish? Critical to the board’s relationship with the expanded C-Suite is an understanding of the rationale for the new and combined titles. That includes an appreciation for what the new structure says about the direction of the company’s business; why the traditional titles weren’t sufficient to provide needed direction; what’s new and special about the novel titles; why co-title arrangements can provide real benefits.

There’s no question managing the C-Suite is the CEO’s responsibility, and she/he isn’t likely to appreciate board meddling in how the organizational chart is set up. But as executive teams expand and evolve, it’s vital that the board understand the reasons for such change. When done right, it’s not meddling; rather, it’s effective board/CEO partnering.