Resources: Blog Post

June 5, 2015

What are the skill sets?

SCNetwork’s Trish Maguire asks the questions about CEO compensation she wishes our November panel had addressed

It’s interesting that in listening to our November panel consisting of two expert consultants and one expert HR leader on “what’s equitable in executive pay,” no one ventured to validate what the indispensable skill sets are for an effective, “best fit” CEO in a global marketplace that warrants a shift in equitable executive pay. And nobody identified definitive performance measurement criteria for the CEO role.

“Equitable” typically means fair, reasonable and even proper, unbiased and impartial. So not only am I curious about how “pay for performance” is actually determined for the CEO role, but also, how would the same process measure up to the pay for performance strategy many organizations use for employees’ pay?

In simple terms, a CEO’s job is to drive an organization’s profits and growth. But might you also subscribe to the notion that today’s CEO needs to focus on how an organization’s current business models need to change in order to be better equipped for unexpected future trend?

Yet, despite a brief comment on the North American practice of scrutinizing quarter-to-quarter results, there was no actual discussion on the dichotomy between delivering today’s performance for short-term profit versus building an organization’s capacity to deliver tomorrow’s profits and organizational growth.

All three panellists agreed on how complex the CEO role is and the need to be a transformational leader. What exactly does that mean, though? Emerging technologies alone require a CEO to understand how to harness and leverage social media channels and increase speed-to-market innovations.

Yes, today’s CEOs face continuous uncertainty and are expected to resolve the most challenging issues while at the same time being inspirational leaders. Surprisingly though, nobody actually defined what the behavioural traits or cognitive criteria are for such a mission. Bearing in mind that the CEO role is unique, I did not hear any description as to what a CEO should be doing and how different the role is from any other executive team member.

So is it accepted that for a CEO, equitable pay is based on driving the successful transformation of an organization by being personally involved and showing up as the role model for the requisite behaviours, belief systems and mindset changes? Does it require a CEO to communicate the importance of the desired transformation clearly, consistently and in a way where employees understand where their role fits and how important their contribution is in making it happen?

Does it require that the CEO builds a strong and effective top team of leaders who are willingly open to promoting innovation and prompting employees to take risks?

The reality is the CEO owns the top position in any hierarchy, no matter how flat the organization. Everybody looks to the CEO first for clarity around vision, strategy, direction and “proper” behaviour. The CEO is the ultimate boss with the absolute authority to ensure the right people are in the right jobs with the best possible skills.

He has to make tough decisions about who has the ability and motivation to drive essential changes efficiently and successfully. He has to set an example of excellence others emulate. All things considered, the CEO needs to have a track record that proves he knows how to increase profits, talent, trust and commitment in an uncertain growth environment.

Perhaps both HR and the board could find inspiration from Leroy Eime: “A leader is one who sees more than others see, who sees farther than others see and who sees before others see.”

I wonder how different the final choice could be if in selecting a “best fit” CEO, both parties used this quote to create two powerful behavioural questions:

  1. How might this increase your employees’ innovation, commitment and trust?
  2. How different might your organization’s future profits and growth be?

What do you think?
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This commentary first appeared in Canadian HR Reporter. Members can read the accompanying article in SCNetwork’s online library.

Image of Trish MaguireTrish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., which focuses on high-potential leadership development coaching. Trish has held senior leadership roles in HR and OD in education, manufacturing and entrepreneurial firms. She can be reached at 

Filed under: canadian hr reporter, ceo, compensation Tagged: canadian hr reporter, ceo, compensation
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