The role of the board chair
Imagine you are an owner of a company, and you set up a board of directors to help govern and guide the business, so it is sustainable for the foreseeable future, maybe even generations.
Do you take the role of board chair, or do you identify someone else to take that role?
This is the dilemma faced by many closely held businesses.
- If I founded (own, lead) the company, I should be the chair!
- It gives me something to do when my role as CEO or President has been passed to someone else.
- How can I trust someone else to have so much power?
- My father was chair and now it is my turn.
What are the roles and competencies of the best board chairs?
You and the family can explore: “Who possesses the competencies to optimize the functioning of the board” and “who can add the greatest value to the company by serving in that capacity” rather than who is “entitled” or “deserves” to be chair.
As the conductor of the Board, the Chair has the following roles:
- Makes sure each board member is contributing value in coordination with the other members
- Manages the climate of the board such that it is collegial and supports healthy differences in a respectful, comfortable setting bringing a variety of points of view; productive without being rushed
- Organizes the work of the board including setting the agenda and annual schedule; ensures information is provided in a timely manner
- Coordinates with the CEO/President and other stakeholders such as the shareholder group, the independent board members, etc.
- Assures the board stays at the appropriate level e.g., “Nose in, fingers out” and maintains independence such that the board’s fiduciary responsibility is carried out
- Speaks on behalf of the board as needed (or represents the board) at special occasions
- Assures committees are formed and perform their tasks including reporting to and engaging with other board members
- Assures the performance of the board and its members are evaluated regularly, and that the composition of the board addresses current needs of the company and the board with the best talent
- Coaches board members if needed
- Communicates important and relevant information to the shareholders
- Represents and upholds the family’s goals and values
And possesses the following competencies:
- Good facilitation skills: assures full participation, with a variety of perspectives, while managing differences constructively; completes needed work, setting priorities, etc.
- Fosters dialogue: dialogue is the process of identifying one’s assumptions and sharing them such that we understand the source of assumptions and fully discussing any topic
- Brings out the best contributions from each board member by seeking to understand all board members’ points of view, competencies and limitations
- Ability to focus on both the content and the process of the meetings simultaneously
- Very effective listening skills, inherent in all the above
- Maturity: the ability to put one’s own agenda aside and focus on the needs of the organization and the board; be responsive (rather than reactive) and to have “thick skin” so that you don’t take the comments of others personally and lose composure.
Other considerations
There are times when additional variables may contribute to the decision of who might serve as chair:
- Symbolic importance e.g., representation of the company to the community, consumer or future buyers.
- Lead Independent Director can be an adjunct to the chair if the chair is inexperienced and/or lacks some of the competencies at the time.
The bottom line is that the board has three major “sight lines”.
While the law of the land usually establishes the core expectations of the board including the duties of care and loyalty, boards are most effective when they go beyond the core and provide the company with oversight, insight, and foresight to move the company forward.
- Oversight: Assurance that the company is operating with acceptable levels of strategic, financial, operational, and legal risk.
- Insight: Asking probing questions, challenging assumptions, and bringing in an outside perspective.
- Foresight: Focusing on the future, both risks and opportunities.
The Chair of the board is responsible to lead the process of the board to assure that the company and its stakeholders benefit from the vision of the entire board.
See also: “How to be a Good Board Chair” in Harvard Business Review (March/April, 2018) by Stanislav Shekshnia for great principles and research.
