Increasing CEO Accountability through Board Initiatives

CEOs are rarely let go when their company performs poorly, mainly because they hold significant influence over the board. So how can boards improve CEO accountability in the case of underperformance? A recent study examined boards of 865 U.S.-listed manufacturing companies from 2010 to 2020 and discovered a valuable source of accountability principles: the military. Boards with directors who have military backgrounds are more apt to take action when a CEO is underperforming, often choosing to remove them when necessary. This article explores three key accountability principles that these directors bring from the military, and offers suggestions for any board to apply these principles in overseeing their CEO.