The Chairman provides leadership to the board, ensuring that the board’s processes and actions are consistent with the organisation’s constitution, its own policies and those requirements legitimately imposed upon it (e.g. statutory requirements), and that it achieves the highest possible standards of governance effectiveness. As appropriate, the Chairman represents the board and the organisation to outside parties.
1. The Chairman is empowered to chair board meetings, with all the commonly accepted power of that position.
2. There may be times when the Chairman is called upon to interpret a board policy or policies to outside parties. All such interpretations shall be consistent with and shall not defeat the stated intent and the spirit of the board’s policies.
3. The Chairman has no authority to unilaterally change any aspect of board policy.
4. With the approval of the board, the Chairman may establish a regular communication arrangement with the Chief Executive in which there is an exchange of information. This might also provide an opportunity for the Chief Executive to use such sessions as a sounding board for proposed actions or to check interpretations of board policy. However;
5. The Chairman may delegate aspects of the authority accompanying the position but remains accountable for its use.
For this job description to be workable, the following aspects of the chairman’s role and responsibilities must be widely understood.
· Setting the boardroom culture and building the board as a team
· Designing and managing the board agenda
· Leading the board’s meetings
· Developing the board’s effectiveness
· Managing the board/chief executive interface
· Oversight of the stakeholder interface
Setting the boardroom culture and building the board as a team
The most evident example of the chairman’s leadership role is his or her management of the board meeting. It is in this setting that the chairman models desired behaviours, acknowledges and enhances the contribution of other members of the board team creating and managing a working environment that enables the board to do its work.
Effective chairmen draw the best from both the board team and the executives supporting it. Such chairmen encourage appropriate and productive participation from all board members, encouraging them to express an independent view and to articulate their aspirations for the organisation. Under such chairmanship, no member leaves a board meeting with his or her opinions unvoiced or unheard. This increases the probability the board will be cohesive and enables it to continually benefit from the wisdom, perspectives and experience of all of its members. An effective chairman builds unique relationships with each board member and uses these to shape consensus (Ward, 2000).
Ideally, a board should not comprise completely like-minded directors. Diversity is vital. However, diversity can also bring its challenges to the chair. The presence, for example, of feisty, strong-minded individuals who differ from the board's general thinking and behaviour norms can be disruptive. Individual directors, prepared to break the team mould, can be seen as mavericks. One of the great challenges of group management is knowing how to harness the creative potential of someone who is 'different' while, at the same time, managing potential damage to team cohesion. The chair is often asked to walk a fine line that typically needs to be informed by experience and strong intuitive skills.
The authority exercised from ‘the chair’ has a primary impact on the board’s culture. For example, a chairman who is over-bearing, controlling and dominating relegates board members to mere ‘yes’ men and women. Apart from denying the board the chance to collate and exercise its collective wisdom, this can become self-fulfilling - directors need to be dominated because they are weak or ineffective! A chairman who allows directors full reign to express their opinions but then offers his opinion in the form of ‘the final word’ only nominally encourages free and open dialogue. A chairman who, in attempting to be ‘facilitative’, defers to fellow directors on all decision-making offers neither leadership nor a personal view. He or she leaves no personal imprint on the board’s decision-making. A chairman who simply lacks basic interpersonal skills such as the ability to assess and judge non-verbal cues cannot create a productive boardroom culture and a cohesive board team.
Designing and managing the board meeting agenda
Board meeting time is arguably a board’s scarcest resource. Advance planning of how best to use it is an area where chairmen can make their most substantive contribution.
Prior to the meeting (perhaps even weeks before) the chairman should have thought his or her way through the meeting agenda, determining how each issue might best be addressed. For example, some discussions are best served by the advance preparation of a definitive staff report with clear recommendations. Others benefit from a process of ‘thinking aloud’ or ‘brainstorming’ with very little structure imposed on the discussion or anticipation of its outcome. Part of this process is to consider how best to utilise members’ particular skills or experience. It may make sense, for example, for the chairman to request that another board member lead the discussion or make a presentation to the board. To prepare directors for the forthcoming meeting, circulating the draft agenda 10 days prior to the meeting inviting input reminds directors of the meeting and starts to focus their attention to the proposed topics for discussion.
Of all the responsibilities falling to a chairman, there is one that is regularly abrogated by many chairmen. That is their responsibility to oversee the design and content of the board meeting. Ideally, the chairman will periodically lead his/her board through the process of developing a work plan or ‘annual agenda’ for the board. This is to ensure that:
· The board as a whole is focused on governance-related matters that justify the scarce time and attention of the board and is not otherwise reacting solely to management concerns or initiatives;
· The board properly addresses all the major strategic issues that will affect the organisation’s viability, reputation and success.
· The board effectively monitors management and takes action to address financial performance or compliance issues;
· The board has ownership of its forward work programme and control of its own meetings; and
· The work programme focuses on what is most important rather than what is most urgent (or ‘interesting’).
Even when the board has such a work plan, there is still the need for the chairman to manage the content and sequence of each meeting to ensure it will be productive and to assist the chief executive to determine exactly what information the board requires and in what form and quantity.
Leading the board’s meetings
Once planning is complete it falls to the chairman to manage the meeting itself according to the plan (agenda). The chairman is primus inter pares (first among equals). Ideally, therefore, he or she should serve as a neutral ‘umpire’. When he/she wishes to advocate a particular position in respect of a matter being considered by the board, another board member should take the chair.
Even though some parts of the meeting may be led-off by the chief executive or another director, the chairman carries overall responsibility for the conduct of the meeting overall. An illustrative list of board meeting success factors highlights the demands on chairmen:
· Agenda items and discussions are restricted to governance issues, avoiding the temptation to delve into management issues, no matter how interesting or pressing these might be.
· Specific agenda items are drawn from an annual agenda or work plan.
· Meetings start and finish on time but with flexibility in the way the agenda is managed so that important matters are given the time they need and other matters, less immediately significant, are progressed in other ways.
· Members receive the right amount of information which presented in a way that supports understanding and decision making. They are adequately prepared for the meeting deliberations.
· The meeting process encourages open, frank and thorough dialogue. While not encouraging repetition and non value-adding comments, every board member’s opinion is sought, acknowledged and respected.
· Behaviour, individually and collectively, is consistent with the board’s previously agreed code of conduct.
· Divergent views are encouraged but differences in thinking are not allowed to become personal;
· More forceful, articulate or ‘higher status’ board members are not allowed to dominate proceedings at the expense of others. All board members are able to participate. The active engagement of all directors in the board’s deliberations is encouraged;
· The board has the opportunity to ‘think things through’. Sufficient time is allowed for the discussion of complex or contentious issues;
· When there has been sufficient dialogue, discussions are brought to a closure and a clear conclusion or decision is reached and accurately recorded.
· The degree of formality in the meeting process serves rather than hinders participation by making for the easy engagement of all board members. More formality is adopted when needed;
· Reporting by the chief executive, staff and board committees focuses on the governance level of issues and does not reduce the board to the role of passive listeners and observers.
· ‘Rubber-stamping’ is kept to a minimum. Issues that, while requiring formal board approval, do not require discussion, and routine matters can often be dealt with at the end of the meeting when, allowing for some early leavers, perfunctory matters can be quickly dealt with.
· There is a clear separation between historical (compliance monitoring and evaluation) and future-related (strategic thinking and decision making) agenda items and a balance of time spent on them that favours a future orientation.
Following the board meeting and well before the next meeting (when the minutes will be presented for confirmation) the chairman has the responsibility for reviewing the minutes of the meeting to ensure that:
Developing the board’s effectiveness
It falls to the chairman, as board leader, to manage the ongoing process of board development. Included within this group of responsibilities is a regular assessment of board and individual director performance effectiveness, oversight of the recruitment and induction of new directors and the professional development of individual directors and the board as a whole. The chairman does not carry out these overall board development functions alone, but he or she should assume the overall management of the processes associated with each of these. In particular, he/she should ensure that these tasks are completed in a timely fashion.
A significant benefit of regular board effectiveness self-assessment is more effective succession planning. Even when the board cannot directly influence its composition, the chairman should play a significant part in ensuring that there is clarity about the current board's relative strengths and weaknesses and that those who will elect or appoint new board members have the best possible understanding of the steps they should take to strengthen the board's performance.
In many organisations, induction of new board members is left to the chief executive or even someone lower down the organisational tree to organise and deliver. The chairman should take the lead in providing a properly constructed induction programme to new board members. Board members are, after all, joining the board, not the management team. This process should be comprehensive, formal and tailored to individual needs. The addition of even one new board member can completely change the dynamics of a board. The chairman has to ensure that this is a positive rather than a negative event.
Managing the board/chief executive relationship
The position of chief executive is frequently an isolated and lonely one. There are occasions when, for a variety of reasons, it is not prudent or appropriate for a chief executive to discuss certain matters with other staff, no matter how senior. At such times, the chairman can provide a valuable, independent sounding board for the chief executive’s analysis of the problem or the actions he/she proposes. The chairman is the ideal person for the chief executive to check with that his or her interpretation of the board’s policies is consistent with the board’s expectations. On such occasions, the chairman acts on behalf of the full board.
It is another question, however, as to whether the chairman should be the link or a ‘go-between’ between the board and the chief executive that so many advocate.
While the chairman must take the principal responsibility for ensuring that the board is a ‘good employer’ of the chief executive (including clear specification of performance expectations and regular feedback on whether those are achieved), there should be no arrangement that implies that the chairman is the ‘boss’ of the chief executive. The board as a whole employs the chief executive. There should be no exception to the basic principle that he/she is answerable to the board as a collective entity and not to the chairman or other individual directors, or any committee (such as one concerned with the chief executive’s performance evaluation).
When the chairman has a close working relationship with their chief executive, no matter what the initial intention, it is almost inevitable that the chairman will become the de facto manager of the chief executive. No chief executive should need to be ‘managed’ in the sense that the senior executives manage other staff. A chief executive does, however, need ‘direction’ and that is quite a different matter. When the chairman enters into the management decision-making process, the board’s ability to hold the chief executive to account for the performance of the organisation’s operations is undermined.
Just as the chairman should not ‘manage’ the chief executive, neither should he or she become an information filter between the chief executive and the board. It is not for the chairman to determine which chief executive-raised matters come to the board and which are dealt with on a one-to-one basis. While there may be times when the chairman determines that ‘this’ or ‘that’ issue is an operational, not a governance issue, the chairman should never act as an information ‘gatekeeper’, or interfere in the board’s ability to address governance matters.
The chairman represents the chief executive to the board and the board to the chief executive. The chairman has a particular responsibility to ensure that the board speaks to and instructs the chief executive with ‘one voice’.
The chairman as mentor
Many chairmen have much wisdom to offer and, if only for the position they hold, will be looked to for advice and guidance. The chairman’s service as mentor should not be confined to the chief executive. In many instances, a chairman will have extensive governance (and sometimes management) experience. He or she is likely to be command respect, not only as the result of the office he/she holds, but also in terms of their track record. This experience should be available to other directors, whether new or long-serving.
Many chairmen find themselves used more often as a sounding board and a listening ear by fellow directors than by the chief executive. It is important that the chairman knows their strengths and weaknesses and is able to maximise their individual contributions. The chairman should be available to fellow board members for frank dialogue about performance and other board issues. He/she can (and should) be honest in giving feedback to individual directors about their individual contributions. The chairman should treat all board members with equal respect regardless of their different abilities and contribution.
When a chairman does serve in a mentoring capacity to the chief executive, he/she must be careful not to ‘instruct’ the chief executive.
Oversight of the Stakeholder Interface
There will be times when the chairman has to take quite a high profile role in representing the organisation to the public, the media and to key stakeholders. The chairman, possibly more than any other board member, needs to understand the stakeholder environment and that the organisation relates to key stakeholders in a strategic way.
As sometime public spokesperson for the board and/or the organisation, the chairman must focus on governance-related matters and should not presume to speak for the chief executive in respect of operational matters. He/she should stay within the bounds of board policy and agreed board positions. The chairman does not have autonomy to make ‘policy’ or determine matters on behalf of the board unless specifically authorised to do so. The chairman should ensure that the board speaks with ‘one voice’ inside as well as outside the organisation.