The Case for BOD Oversight Focused on Leadership: Good Leadership is Good Business

by Sep 11, 2023

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In most organizations, Board of Directors (BOD) have a myriad of oversight committees to ensure the company’s ethical, financial, and operational stability. While these committees cover everything from accounting to risk management, one important area is often overlooked — leadership accountability tied to employee satisfaction and engagement. 

The Problem with Toxic C-Suite Executives

Unfortunately, the corporate landscape is rife with C-suite executives who are command-and-control driven, lacking in self-awareness and emotional intelligence. Such leaders create toxic environments that wreak havoc on employee morale and well-being. Employees find themselves in distress, which ultimately diminishes productivity and engagement.

Though there are tools to measure employee engagement and job satisfaction, these are rarely tied back directly to leadership performance in a systematic way. This lack of accountability lets toxic executives off the hook, eroding the company’s culture and affecting its bottom line.

The Underestimation of High-EQ Leaders

While toxic executives perpetuate a harmful work environment, leaders with high emotional intelligence (EQ) are frequently sidelined or overlooked. Emotional intelligence, the ability to understand and manage one’s emotions as well as those of others, is crucial for creating a more supportive, productive, and resilient workplace.

Oddly enough, there exists a long-standing bias that sees emotional intelligence and the ability to treat people well as a “weakness” rather than a strength in leadership. This is a deeply flawed view. A leader who lacks empathy and the ability to connect with others might excel in short-term task execution but will inevitably fail in building a sustainable, loyal workforce.

Empathy Isn’t Just Nice — It’s Profitable

Research shows that organizations with empathetic leaders tend to be more profitable. In a world where word of mouth spreads like wildfire, and employees can share their experiences anonymously through social media and employment review sites, the importance of good leadership cannot be overstated.

According to a study by Businessolver, 93% of employees are more likely to stay with an empathetic employer. Another study by Gallup showed that highly engaged teams result in 21% greater profitability than those teams that are not engaged.

Furthermore, the profitability linked to empathy goes beyond employee retention and engagement. An empathetic culture is attractive not just to potential employees but also to consumers and investors. 

“Companies that demonstrate social responsibility and ethical leadership often enjoy better brand reputation and customer loyalty.“

This type of goodwill is immeasurable but significantly impactful. In an age where consumers have ample choices, many opt to engage with businesses that stand for more than just profit. 

Empathy in leadership sets the tone for the entire company’s approach to customer interactions, social responsibility, and ethical considerations. In turn, this positively influences how the market perceives the brand, often leading to higher sales, better customer retention, and in some cases, a willingness by consumers to pay a premium for being associated with a brand they feel is socially responsible. 

Therefore, empathy is not just a ‘soft’ skill but a hard-nosed business imperative with tangible financial benefits.

Radical Oversight for Leadership

Given the indisputable importance of effective, empathetic leadership for both employees and the company, it’s high noon for BODs to implement oversight committees focused on leadership.

These oversight committees can:

Review Employee Satisfaction Surveys: Regularly analyze anonymous employee feedback about leadership and implement actionable changes based on these reports.

360-Degree Feedback for Leaders: Include peer, subordinate, and self-assessments to get a holistic view of a leader’s performance.

Tie Compensation to Leadership Performance: Make a portion of executive compensation dependent on metrics related to employee satisfaction and engagement.

Professional Development: Create pathways for training and developing leaders in emotional intelligence and effective management styles.

Promotion of High-EQ Leaders: Ensure that capable leaders with high levels of emotional intelligence are given opportunities for higher positions, rather than being sidelined.

Transparency: Keep the employees informed about what actions are being taken to ensure good leadership, creating an atmosphere of trust.

Implementing a New Paradigm of Accountability and Empathy in Leadership

As we move further into the 21st century, it’s crucial to evolve our understanding of effective leadership. Traditional oversight methods, while essential for various operational aspects, have largely failed to hold leaders accountable for the environments they create. 

Implementing a new paradigm that emphasizes both accountability and empathy provides a comprehensive approach to leadership oversight. It’s not just about scrutinizing financial sheets and operational metrics; it’s also about assessing the softer yet equally critical elements of management. 

This involves creating a culture that rewards empathy and emotional intelligence while holding leaders responsible for the well-being and engagement of their employees. In this way, we can foster workplaces where both people and profits thrive.


Overlooking the importance of leadership tied to employee satisfaction and engagement is not just detrimental to the workforce but also to the business as a whole. It’s time for oversight committees to expand their scope to include the vital element of leadership. By taking a more progressive approach and appreciating that empathy and high emotional intelligence are not just “nice-to-haves” but “need-to-haves,” companies can foster healthier work environments and, by extension, more profitable businesses.

To recap, this new paradigm requires a multi-faceted approach, including 360-degree feedback for leaders, tying compensation to leadership performance, and promoting high-EQ leaders. Failure to adapt could mean not only a disengaged workforce but also a decline in customer loyalty, investor trust, and ultimately, profitability.

We can’t afford to ignore this issue any longer. Boards of Directors, HR departments, and employees must advocate for and implement these changes. It’s high time to challenge the outdated norms and make the bold move of holding leaders accountable for the work environment they create. Because ultimately, taking care of people’s needs isn’t just radical; it’s essential.

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