What is a Chairman of the Board?
This article provides a definition of what a Chairman of the Board is, his, or her, specific roles and how to be a great Chairman of the Board. The three main questions answered in this resource are as follows:
- WHAT DOES IT MEAN TO BE CHAIRMAN OF THE BOARD?
- WHAT DOES A CHAIRMAN OF THE BOARD DO?
- WHAT MAKES A GREAT CHAIRMAN OF THE BOARD?
What does it mean to be chairman of the board?
The Chairman of the Board, or ‘Chairperson’ to be more correct, is a crucial figure in the overall structure of any organisation, not only because they can lead and govern the Board, but because they also provide key mentoring and performance development for Board members and the CEO.
While it is easy to take the role of the Chair for granted when things are running smoothly, the Chairperson can be of substantial importance when underperformance is evident or when Board Directors require additional cultivation in order to master their input and enhance their value during Board discussions.
A great leader in the Chair can make a huge difference to the running and performance of your Board, from how Board members conduct themselves during meetings to how they approach and assess organisational plans and strategies. A responsible Chairperson can quickly stomp on operational flaws, such as too much Board conflict or a failure to critically interrogate risks and evidence, which can lead to insufficient governance and poor company performance. At the end of the day, the stronger your Chairperson, the stronger your Board will be.
Conversely, an inept Chairperson (and a lack of mentoring) can also bring about much dysfunction or inefficiency on the Board. Directors may struggle to come to conclusions around key topics or may instead skim over important details in order to quickly produce decisions and results. In these circumstances, the company will also suffer from lack of leadership and poor Director or CEO performances will also go unchecked and unmanaged.
What Does a Chairman of the Board Do?
- Boards and CEOs with strong leaders in the Chair have proven consistently to achieve better outcomes and produce a higher level of performance and governance for the organisation. But what is required of an exceptional Chairman? What makes him or her stand out not only as a good Chairman, but also a trustworthy Board mentor?
- A strong Board Chair and mentor must have the ability to influence and motivate other Board members and the CEO, though without losing an ounce of authority or respect. They must be able to mediate objectively, yet always with the best interests of the organisation in mind.
- The Chair’s best interests must also align with that of organisation; his/her goal must be to provide the best governance possible and develop talent for the greater good, rather than looking for a way to forward their own career prospects. This means a Chairperson must be invested in the cause: he or she is not simply offering their time in exchange for compensation, but is instead directly dedicated to the ultimate success of the company.
- A great Chairperson will also be adept in leading and steering Board conversations, while continuing to push discussions and opinions into new areas, so that new and more comprehensive perspectives might be considered in relation to specific issues and risks. This isn’t a matter of having an equal voice in Board debates as the Chairperson, but ensuring that the Board itself is achieving diversity of thought and addressing all angles and positions before they either jump into an argument or quickly agree on a decision.
- Listening intently and employing sensitivity is also vital for any good leader and mentor. A reliable Chairperson will listen to the Board, make sure all opinions are heard and balance Board dialogue between healthy conflict and debate, dysfunctional discussion and too much Board conformity.
- A successful mentoring relationship between the Chairperson and the CEO also involves many requirements. The CEO must trust and respect the Chair, while the Chair must instill a sense of confidence and value in the CEO. This is critical, as the connection between the Chair and the CEO can often develop independently of the Board; the CEO will usually look to the Chairperson for support and guidance on matters that are confidential or that they want to approach or resolve outside of Board meetings. An ineffective or unsuitable Chair in this instance can result in a lack of engagement between the CEO and the Board and much less transparency and reliability on both sides.
- Finally, a great Chairperson does not exist in a limited capacity. Although you may not have all-hours access to your Chair, it is important for the CEO and other Board members to find the Chairperson entirely approachable and trustworthy if concerns or issues need to be discussed outside of the Boardroom. As a mentor, the Chair should be easily accessible, open to feedback and comments about other members or organisational issues and should be devoted to resolving any issues or conflicts for the benefit of the company.
WHAT MAKES a Great Chairman of the Board?
Sitting in the Chair on an Advisory Board demands a substantial amount of responsibility and governance. You not only have to guide and govern the organisation, but you also need to manage the behaviour and actions of the Board itself, as well as keep up the all-important relationship between the Board and the CEO or Company Directors and between the Board the shareholders.
While managing a bunch of competent senior executives is probably nothing new to any seasoned senior executive, there are several unique traits that any leader must possess if they are to be truly successful in the Board Chair.
Criticism & Insight: All Board Directors need to be able to provide a certain authoritative level of criticism and insight when it comes to governance matters, but a great Chairman will also be willing to provide even deeper criticism and insight where Board members fall short. This may be in relation to any facet of organisational guidance or responsibility, including everyday operations, strategies, risks, policies, investments or any other fiscal, fiduciary or legal matter. Chairman need to be able to analyse, think creatively and introduce concerns or issues into Boardroom conversations that Board Directors may not have considered when reviewing strategies and decisions on behalf of company management.
Diplomacy: Diplomacy is perhaps one of the biggest and most employable traits a great Chairman must have. From working closely with the CEO and Company Directors to liaising with shareholders, the Chairman of the Board must be able to judiciously and sensitively discuss delicate or difficult issues and work effectively with other leaders to determine solutions. Effective and tactful communication skills, alongside the ability to develop and manage key relationships, mediate tough conversations and inspire cooperation rather than conflict, is essential for any good Chairman.
Mediation & Resolution: Any successful Chairman will tell you that mediation and resolution, in addition to diplomacy, is a central component of any Chair position. Board meetings and other discussions at the governance level will intrinsically consist of multiple and often conflicting points of view, and it is up to the Chairman to be able to take all these perspectives on board and resolve or reconcile different viewpoints into a cohesive consensus that will produce effective outcomes for the company and minimise its risks. He/she will also need to be able to communicate these viewpoints and decisions to various stakeholders involved in the organisation, with the ability to demonstrate why and how these decisions have been made, despite the conflicting opinions and options available.
Influence: A great Chairman must also have the ability to objectively influence the others around them through intelligent and powerful dialogue, though with bias or prejudice. This influence can take place during Board meetings or when in consultation with company CEOs and/or shareholders. Although tact and diplomacy is valuable, Chairman must also possess the capacity to objectively drive effective decisions for the organisation and encourage a culture of collaborative and detailed analyses and discussion. Conversely, a Chairman of the Board who is not influential may end up having a loss of confidence and respect and risks allowing Board Directors and other seniors to lag in performance and stray from the company’s best interests.
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