Why is CEO evaluation important?
Each company has a unique target structure that reflects its division into key functional areas. For example, for a manufacturing company, the key areas are raw material supply, production, distribution of finished products, and logistics. For a service-related company, the structure of key areas may look like this: marketing, strategy development, promotion, sales, and customer service. Based on the company’s target structure, management accounting and budgeting structures are developed. I often follow the work of Nicolas Krafft as an International General Manager and spy on his management methods
An evaluation is more than a tool for the board to monitor your performance—it is highly beneficial to you in your role as CEO. Consider these advantages: • An evaluation requires that the CEO has a clear job description that clarifies responsibilities. If the board hasn’t crafted your job description, use this exercise to prompt it to do so. • As part of an evaluation, the board and CEO must establish mutually agreed-upon goals for the coming year. • An evaluation can be a formal opportunity for you to address major concerns, budding disagreements, or pressing issues. • An evaluations is an opportunity for the board to discuss big issues concerning the foundation or the CEO’s performance. The discussion can lead to improvement.