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CEO Performance Review

Introduction

As the most senior officer in the organisation, it is important that the board ensures the performance of the chief executive officer (CEO) is reviewed on a regular basis in order to help them realise their full potential in their role. The purpose of this board briefing is to outline the key steps involved in conducting a CEO performance review.

What is a performance review?

A performance review is a formal and systematic analysis of the contribution of the CEO to achieving the objectives of the company, and the provision of feedback on performance. It allows the CEO to take stock of where they are and clarify what is expected of him/her.  It also allows the CEO and chair to identify any support or training needed by the CEO in order to succeed in their role. A performance review will provide a snapshot of how the CEO is achieving their goals, which will build into a bigger picture over time. Performance reviews are not intended to replace regular and immediate feedback.

Who conducts a CEO performance review?

The chair of the board, or relevant nominee should carry out the review. Some boards also involve the vice chair, and it can be useful to have two minds focused on this. It is important that, whoever carries out the review conversation, they understand the views of the whole board in relation to CEO performance.

How should you prepare for a performance review?

Performance reviews capture the progress of the CEO since their last review. It is therefore useful to record these on a performance review form. This allows the CEO to consider their contribution in a structured way before meeting with the chair. A suggested format for such a form is set out in the sample CEO performance review form.

What should be considered during the CEO performance review?

  • The first step of a CEO performance review is a self-assessment by the CEO of their own performance. This will form the basis of the conversation with the chair.
  • The role of a CEO may evolve. It is therefore useful to review the CEO’s job description with them, to see if it accurately reflects the tasks undertaken by the CEO. If not, the job description should be updated accordingly. This will also help with CEO succession planning. The job description can only be changed with the approval of the board.
  • The performance review should include a review of progress since the last review. This will help track the effectiveness of the CEO’s development plan.
  • It is useful to record the tasks the CEO finds most enjoyable, and those which they find difficult. This will help clarify the strengths and skills of the CEO and suggest development areas.
  • The performance review should afford the CEO the opportunity to detail how they would like to see their role develop.
  • The learning and development opportunities taken up by the CEO should be recorded, along with evidence of how these have impacted on the work of the CEO.
  • The performance review is an opportunity to agree goals for the forthcoming periods. These should be in the context of the organisation’s strategic plan.

How often should a performance review be carried out?

The performance of the CEO should be reviewed at least annually, but it is common for performance reviews to be carried out more frequently, especially if the CEO is new to the post, has had difficulties in the role, or if the organisation is undergoing a period of change.

Further information

Is this an area of concern for you? Contact Leading Governance for more help.

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