Fabulous article by Brad Feld – highlighting Heidi Roizen ‘s key elements that investors are aware of or should be aware of when it comes to the CEO of a company.  You will  find the link in this article for the specific details, but I just had to cut/paste Heidi’s list on key clues that the CEO must go.  Please link to Brad’s article for all the details in context, and additional information.

http://www.feld.com/wp/archives/2005/09/signs-that-a-board-should-consider-replacing-the-ceo.html

1. I never hear from the CEO (other than at board meetings) except after I initiate the contact (or worse, when he does not respond even when I send an email or leave voicemail (i.e. avoids responding to me.))
2. All communications from the CEO are “sales pitches”. If the news is all good, I know something is wrong. If all communications are “presentations” (instead of interactions), something is wrong. The corollary to this is when any bad news comes to me from a back channel (i.e. a customer, another board member, or (most often) another employee of the company.)
3. There is odd body language / eye contact in management (board or otherwise) meetings among the direct reports. This is hard to articulate, but I can just see/hear/feel it when the management team disagrees but does not feel that they can have a dialogue about the issues.
4. The “opportunities” always turn into “learning experiences” – that is, when I am constantly told about great deals about to happen, and then it always ends up that the deal doesn’t come in as planned. This is okay if it happens occasionally, but not if it is common practice. This dynamic would be fine if the plan were being met, but it never is in this scenario.
5. There is a revolving door at the VP level. I get very suspicious when lots of people leave for “lifestyle” issues, particularly when they are hyped as heroes when they are hired, yet I am told when they are leaving that “it is actually good this person is leaving as she wasn’t very good.” A corollary to this is when the CEO constantly blames (or complains) about one of his direct reports but then hangs onto that person because confrontations are unpleasant and/or they don’t want to deal with the pain of going through the replacement process.

Following are three more that are not really signs that you should replace the CEO, but rather are signs that you should have ALREADY replaced the CEO (and that you are now likely in deep shit.)

1. Not facing fiscal reality. For example, the company is 3 months away from running out of cash, there is no clear financing in site, and the CEO is still refusing to take “survival measures” to cut staff or do whatever it takes to keep the company afloat. As my partner Rex Golding likes to say, “hope is not a strategy.” When the board has to force a plan/budget change, it is too late.
2. Doing desperate deals. The CEO starts coming up with deals that make no sense but have big names or big numbers involved. Hail Mary management – very bad.
3. Pandering to the board. The CEO takes every request or idea from every board member and acts on it as if it is a smart idea, with no thoughtfulness, discussion, and no generation of consensus. “Please, if I think you’re very smart and I am very responsive, can I just keep my job?”