If you’re a entrepreneur with a strong will and a big attitude, you’d better get yourself an equally strong-willed board of directors – even if it’s an unofficial one. Otherwise, you’re likely to drive your company into the ground.
According to a new study, dominant CEOs, who are powerful figures in the organization as compared to other members of the top management team, drive companies to either excel or to fail spectacularly. Either way, their affect on company performance is extreme.
The solution is for these powerful CEOs, entrepreneurs and bosses is to balance themselves out with equally strong-willed boards or upper management.
Companies with strong boards counteract powerful CEOS, and swing the tide of performance to the plus side, according to the research in the current Journal of Management Studies.
“A strong board provides a useful watchdog and a second set of valued opinions to the strategic direction of the company. This oversight by the board can help catch the deviant strategy that could lead to firm failure, before it is implemented by the CEO and the organization’s top management team,” the article said.