What to do when your CEO is struggling

Boris Johnson is once again facing pressure to resign, following the Conservatives’ crushing defeats in the Wakefield and Tiverton & Honiton by-elections. The Conservative Party Co-Chairman, Oliver Dowden, has resigned, saying “someone must take responsibility”. While he claimed this was him, many will conclude that that “someone” should have been the Prime Minister.

The Prime Minister has said that he intends to "keep going" despite the defeats. However, former Tory leader Michael Howard is among those who’s called for his resignation. “I think the party, and even more importantly the country, would now be better off under new leadership,” he told Radio 4’s The World At One. Furthermore, he called on Cabinet ministers to remove Johnson from office. “[T]here are others who can take action who could make that course come about ... I think that action needs to be taken,” he said.

Familiar situation

Businesses who’ve experienced a faltering CEO at the helm may be familiar with the situation that the Conservatives now find themselves in. Writing for Strategy+Business, Ram Charan advises that Boards should act quickly if they suspect their CEO is floundering. “The board members of your company have to respond to early warning signals before outsiders do. This will give the board time to explore the issue and make the right decision,” says Charan.

Looking for more

Recession | THIS is what's keeping CEOs awake at night right now

The choice for the Board is whether to rally round the CEO and support them or let them go before more damage has been done – a situation the Conservative Party finds themselves in now. An article in Forbes set out the case for how a Board can tell if their CEO needs to go; if the CEO exhibits a lack of vision, a refusal to listen to anyone else (believing they themselves have all the answers), an inability to lead their team in a cohesive direction, and/or an inability to react to changing circumstances, then it may be time to say goodbye. Forbes warns that: “…CEOs who can't react in the moment and turn the ship to the left or the right run into icebergs, and then they blame other people and leave with multi-million-dollar severance packages.”