Counseling can be verbal in nature as an on-the-spot correction. Any counseling designed to correct a significant shortcoming needs to be addressed in writing. The regulations that cover counseling are FM 6.22, AR 623-3, AR 635-200, and AR 600-20. The rank of the individual does not matter.
However, the fact that we are discussing a CSM is significant because it indicates a serious problem. Any attempt to provide a below average evaluation report or remove the individual from a position of trust or responsibility should be documented in writing if it is to be taken seriously.