Self-evaluation is very important for everyone, especially when it’s for company development. It is done to show gaps that need filling, mistakes that need correction, that is, where to improve and do better.
Why does this matter for the CEO?
An article by BoardClic, a software company, shows that the CEO is the link between the top functions in an organisation, from the board of directors down through to the management team.
His or her actions and decisions resonate throughout the entire business. Hence, the importance of ensuring strong and effective leadership from the chief executive cannot be stressed enough. A regular, purposeful feedback loop regarding CEO performance, a cornerstone of effective governance, is key to claiming that insurance.
But in some institutions, employees are the ones to mostly be evaluated; they are the ones who at the end of the year or month face their managers and receive a report on how they performed.
A CEO evaluation is undoubtedly the best measure a board can take for following up on CEO performance. The process most often involves objective critique from board members and the chairman, as well as a subjective evaluation conducted by the CEO.
Vivens Uwizeyimana, the Chief Executive of UmuravaWork, an all-in-one solutions tech start-up, says that it is very important for CEOs to have self-assessment.
Basically, the CEO is the company’s leader, and it is normally known that a leader should be exemplary so that his or her people follow accordingly, he says.
"For the CEO to conduct self-assessment is something very important because he or she gets the results of KPIs or set metrics status. If there is more work to be done, he or she takes the step to consult effectively the board or other fellow CEOs in the network.”
He adds that it is the first and very important stage to start with while guiding other employees in the company, as it always creates more value for the CEO to recommend a certain initiative or tool to the employees while he or she has experienced it before.
"If the CEO is accountable, he or she also holds the employees accountable in the right way. On another hand, if the CEO is accountable and he or she reminds the employees to hold him or her accountable, it creates a collaborative environment which later creates good working relationships.”
However, the article on BoardClic says that it can be difficult for superiors, peers, and subordinates to give honest feedback to their CEO. This is mainly due to the nature of the position.
Naturally, the CEO is the decision maker when it comes to the continuous employment of the people he or she oversees. This creates a dynamic in which it might be costly for employees to criticise their leader, so why risk the consequences?
Most often, the reason superiors struggle with giving feedback to their CEO is a lack of mutual understanding around non-financial KPIs. Sure, it’s clear that the chief is to deliver a certain return to shareholders, but the next level of detail is usually missing. Thus, it’s crucial that the board, whose primary responsibility is to provide oversight and assistance to the CEO, establishes a sustainable feedback system that aligns all parties in the operation.
Uwizeyimana carries on saying that the company or an organisation pays a price if its CEO doesn’t take into consideration that self-evaluation is needed or that revisiting its values is important.
If the CEO doesn’t conduct self-assessment, it immediately limits the company’s performance in terms of growth and development. As it is primarily known, the CEO’s role includes making decisions and if the CEO is not taking enough time to make the decisions that are not aligned with the company’s values, the company will be going in a bad direction, he adds.
"All in all, if the CEO is not conducting self-assessment, it is difficult for the company to move faster and achieve the targets that are aligned with the company’s vision and mission.”