Professor David Larcker is Morgan Stanley Director of the Center for Leadership Development and Research at the Stanford Graduate School of Business.  Brian Tayan is a researcher in the center.  They are co-authors of the book A Real Look at Real World Corporate Governance.

There is very little discussion in the research literature about the professional coaching and advising of senior executives at the very top of organizations. We conducted our survey to help fill this gap with descriptive information that provides the basis for careful thinking about coaching.

We find that approximately one in three CEOs receives coaching or leadership advice from an outside consultant.  This number might surprise you as low, when you consider the broad set of leadership skills required to run a corporation. Presumably even the most qualified executive will have gaps –in persuasion skills, conflict resolution, empathy, etc. – which can be improved through development and coaching.  While these gaps clearly did not hold the executive back during the progression of his or her career, they remain leadership attributes that can be improved through practice. We might expect a CEO to identify these attributes – either through prior performance evaluations, feedback on the job, or input from the board of directors – and seek coaching.  A third-party advisor can provide neutral but insightful feedback to help them get better.

Executive coaching is also important from the perspective of corporate governance. Anything that is relevant to the performance of the company should be of consideration for the board of directors. Prior research suggests that corporate performance measurement and individual CEO evaluations give significant weighting to financial results but much less weight to nonfinancial factors (such as talent development, employee engagement, customer satisfaction, etc.) that are statistically correlated with long-term success.  Intuitively, we might expect that leadership skills play an important role in the success of these factors, but we find that boards are not necessarily the driving force in encouraging CEOs to develop skills through coaching.  Instead, 78 percent of the CEOs who receive coaching report that the idea to do so was their own.  Only 21 percent say that it was the board chairman’s idea, and 19 percent say that it was the idea of another person such as an individual board member.

Furthermore, we find that nearly two-thirds of CEOs who receive coaching do not share their progress with the board of directors.  Because CEOs claim that a decision to receive coaching was their own, they might similarly consider coaching a personal matter that does not need to be communicated with their board. Or, they might believe there is a stigma associated with professional coaching (e.g., that the board will perceive it as a weakness, a form of “self help”). Even so, it is not difficult to understand how this information might be informative board members and how they might benefit from understanding the skills and attributes the CEO is working to develop, even without receiving a formal report on his or her progress.  While not part of the formal CEO performance evaluation, this information still helps to complete their knowledge of the CEO’s management style and how it might be evolving.

For example, in our survey, 23 percent of the CEOs who use a coach say that they are working to improve team building skills.  However, only 13 percent of directors believe that their CEO needs to develop team building skills.  This gap highlights a general difference in perception of management styles and strengths.  By contrast, 23 percent of CEOs report that they are working on their mentoring and team building skills while 24 percent of directors say that their CEO needs more development in these areas.  Alignment along this dimension indicates greater consistency in the perceptions of how CEOs can improve.

CEOs might have won the “race to the top.” They were vetted by the board and ultimately selected to lead the corporation.  While they have the skills—both functional and managerial—to reach this level, this does not mean that their development is fully complete. The degree to which CEOs seek out help to develop skills or attributes that they are lacking, or that are underdeveloped, will ultimately help to determine their long-term success as well as the long-term success of the company.

A copy of the complete survey results is available here.