Lexicon

What does the chair of the board do?

by Stephen Conmy on Jun 22, 2022

chair of the board

What does the chair of the board do?

Chairs’ roles can vary widely across different industries. Often, it depends on the company size; smaller companies will have Chairs that are more active in the company’s day-to-day life. Some may concurrently serve as CEO. In bigger companies, this is less likely. Still, it is also generally not recommended to preserve independent observation and cooperation and maintain a system of checks and balances at the top level.

So, what exactly is the role of the chair of the board? Primarily, the Chair’s responsibility is to the board. They must always ensure that the process is as seamless, constructive, and deliberative as it needs to be when the board gathers.

If you’re new in the role of Chair or have eyes on becoming one, here are some tips on maximising your impact.

You know your role

A Chair is not a CEO, not a managing director, and is not concerned with leading employees. It’s important to remember this because the definition can become lost in practice.

This is especially true for former CEOs, managing directors, and other executives who have now moved on to fill the role of Chair. Those individuals need to leave their hands-on, direct leadership mindset behind, but they can sometimes struggle.

One of the Chair’s primary roles is facilitating and planning board meetings. Acting like a CEO in one of these meetings – with more command and less guidance – could stifle colleagues’ voices and limit the board’s ability to be the think tank it’s supposed to be.

You are ready to act

A good Chair knows that they are at the helm of a board who will need to act fast and decisively if the company finds itself in hot water. Your CEO, who may well hold the most power day-to-day, may suddenly look to the board for urgent decisions on what to do next.

You hold a powerful voice on the board when this happens. Decisions are never yours to make alone, but when something goes wrong, your colleagues will depend on you to create a positive, deliberative discussion around what to do next.

In hot water, a company could have tough decisions to make; maybe its best next move is a rapid change in environmental policy, an en-masse move to remote working or a dismissal of the CEO. You will need the experience to know what this move should be, the confidence to endorse it, and the ability to take others’ opinions on board to ensure it’s done right.

You maintain your independence

Take the above point with the caveat that the reverse is also true. Your role is Chair; if you’re not on hand to deal with an urgent, top-level problem, take a step back.

Maintaining a healthy level of distance from the organisation’s inner workings is essential. Ensure that you are looking at the organisation’s progress with a sovereign mindset, free of day-to-day management issues, fuelled by your industry experience and knowledge. That experience, your broad judgement, and your ability to facilitate discussion about it are your strengths. They let you see opportunities and challenges for the company that others might not.

You’re a good relationship manager

As Chair, you will work alongside a collection of board members – each with a wealth of experience, each with their unique view on the company’s direction. In addition, you need to act as a mentor to the CEO, as an ambassador in the industry, and as a link between shareholders on one end and employees on the other.

This is where your ability to manage relationships matters. If you’re Chair, you’re a vital link between all of these areas of governance, and colleagues should enjoy a sense of comfort and confidence in the environment you create. Otherwise, that vital link risks being broken.

It would help if you were a good communicator, listener, and facilitator. If fellow board members have issues to address, ensure they can manage them. If the CEO needs advice, advise them; if shareholders want an honest picture of the company’s direction, give it to them. And above all, if you see friction developing within or between these company layers, be ready to tackle it.

You’re committed to the role

Chairs are some of the most respected members of a governance community. There is a high degree of professional achievement associated with those appointed to the role, but remember that your responsibilities go beyond that.

You should always be aware that you are an essential part of the company machine. Phoning it in, primarily if you work in a part-time capacity, won’t produce results.

Keep in mind that your duties will likely go beyond the baseline of chairing board meetings. You’ll probably need to induct new board members, evaluate current ones, be available for shareholder queries, pay attention to diversity on your board, provide input to the remuneration committee, and represent the company wherever necessary.

Put aside time, thought, and energy for all the above. 

Watch the full webinar
Tags
Board
Board Roles
Chairman

Related Posts