What makes a good Chairperson?

28 October 2019

Screenshot at Oct 28 13-56-33

In today’s challenging world, very few positions warrant higher expectations, greater scrutiny and more demands than that of a Chairman.  Long gone are the days when the Chairman just had to ensure that there was good governance on the board – which in itself is, and can be tough enough!

 

Broadly speaking the Chairman has to ensure that he/she heads and runs an effective and impactful board, whilst simultaneously managing relations with stakeholders and shareholders.  No easy task!

 

Having worked with several organisations and their boards, as well as researching this very topic, below I list some of the key factors which are required of a good Chairperson.  They include:

 

  • Accountability – knowing to whom/what you are responsible

It’s easy to assume, with all the noise surrounding us that our shareholders or stakeholders or employees are the main groups to whom we are accountable.  Certainly, they form a large factor to one’s strategy and decision making process.  However, a Chairperson must also never forget that he/she works for and represents that organization – helping to build something that is successful and sustainable into the future.  Short-termism should not be part of that equation despite pressures to the contrary.

 

This person is there to lead the board of directors.  Together the board only meets for a short and limited period of time at regular intervals annually to determine the long-term future direction of said organization.  This is by far the most important task of this role.

 

Research has shown that some have observed that certain Chairs extend their mandates to include leading management teams and/or being more vocal with the external world.  Whilst some organisations may require this additional ‘help’, most would argue that these tasks tend to distract Chairs from their true function as it often leads to a loss of focus.

 

 

  • Challenge and bolster

Different types of organisations (eg charity vs listed companies vs public sector) have varying requirements of their boards and management teams.  More mature organisations are likely to have different needs compared with younger ones such as in areas of regulation or structure, amongst many other factors.  More established businesses’ boards tend to focus on executive compensation, evaluation and monitoring, whereas smaller and younger ones might need more advice on strategy and management, as well as external resources.

 

However, common to all is that the board should always remain focused on its mission – to create long-term value and to measure its progress.  In short – how can this board be as effective in its mandate as it can possibly be?

 

What issues are strategic and important for the organization?  Is the board clear about the context, comprehends the significant facts and can distinguish between those and assumptions?  Can they see what the challenges and risks are?  How can they find specific and effective solutions for those?  Are those sustainable, practical and understandable enough to execute?  How are these measured and reviewed?

 

An excellent Chairperson defines behaviourial standards for directors and ensures that these are abided by.  Constructive feedback and active encouragement are standard, whilst poor and unethical conduct are dealt with, swiftly, strictly and consistently.  Healthy conflict and discussion is encouraged, as is fair, consistent and constructive treatment to and between board members.  All these will contribute to the efficacy and effectiveness of the board and the long-term interests of the organization.

 

Additionally, a good Chair speaks for the board in its relations with its important stakeholders, be they shareholders, regulators, management, communities etc.  The Chair will ensure that the directors are well informed but this role does not replace those performed by the organisation’s executives, if relevant, and in their dealings with the stakeholders.

 

  • Ethics – doing the right thing for the organization – always

When things are going well, the role of the Chairperson can seem, well, relatively smooth sailing.  However, reality will inevitably strike all organisations at any and all stages of their business and life cycles.  This is when the mettle and strength of character of the Chairperson will appear, or not.

 

As discussed earlier, the mandate of the Chairperson is to lead an effective board.  To ensure that the long-term mission & interests of the organization are considered in all decisions.  At times, this can be phenomenally difficult and challenging – possibly requiring personal sacrifice through time, heavy conflict and perhaps even a loss of that role.

 

And with the latter point, an excellent Chair will put ego aside for the greater good of the organization.  Knowing when and how to do this is helpful.  Encouraging the organization to find the appropriate successor of their choice, and helping that successor in a professional and helpful handover, such as the passing of information, key introductions etc.  In short, anything to help the successor succeed in the interests of the organization.

 

 

In addition to the above, the most commonly listed skills that people require from a Chairperson are:

 

  • An ability to chair effective meetings
  • Good understanding of the organization, its mission and its workings
  • A talent for being objective whilst influencing without dominating
  • Resilient and resolute without being rigid
  • An effective communicator

 

From research and anecdotal evidence, it is clear that it takes strength of character, focus and a large dose of humility to be a good and effective Chairperson.  To do what is right for that organization, it has been noted that good Chairs need to be excellent at listening, challenging people and beliefs, as well as supporting them.  A fine and often precarious balance, but certainly possible!

 

This was written as part of our Board Fundamentals series.

 

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