The crucial role of the board chair - a guide for directors

In an age where every decision can pivot the trajectory of an organization, the board chair emerges not just as a figurehead, but as a lighthouse guiding the board through myriad challenges and opportunities. As the nexus between governance, strategy and stakeholder engagement, the chair's role is paramount in carving the path to success. This report provides an in-depth exploration into ten pivotal areas where the chair can amplify board performance. As a prelude, consider these compelling takeaways:

Quick take:

• The chair shapes the very essence of an organization, cultivating alignment with its mission, vision, and values
• Through fostering open dialogue and nurturing diversity, the chair enriches board discussions, catalyzing informed decisions
• Efficient board meetings, stakeholder engagement, and crisis management underscore the chair's multifaceted responsibilities, revealing the depth and breadth of their influence

Let’s dive in. (See endnote on chair/lead director.)

10 essential roles of the board chair

1: Embed corporate culture and purpose

A board chair's influence goes beyond presiding over meetings. They shape the very soul of the organization.

• Champion the organization's mission and vision: The chair should constantly reinforce the company's core purpose, aligning all board decisions with its overarching mission.
• Promote a robust corporate culture: By embodying the company's values and principles, the chair sets an example for the entire organization, emphasizing the importance of culture in daily operations and long-term strategies.
• Deliver alignment with company values in decision-making: Every board decision should resonate with the organization's core values, and the chair plays a pivotal role in delivering this consistency.
• Engage board members in purpose-driven discussions: Beyond financials and strategies, the chair should steer conversations around the company's societal impact, sustainability, and contributions to the community, emphasizing its broader purpose.

2. Foster a culture of open dialogue

An effective board is one where diverse opinions are voiced, discussed, and respected. The chair plays a pivotal role here.

• Facilitate discussions that allow for multiple perspectives: Boards are composed of members from varied backgrounds. The chair should foster an environment where each member feels empowered to share their viewpoint.
• Encourage transparency and honesty among board members: Hidden agendas or concealed opinions can be detrimental. The chair must cultivate an atmosphere of trust where board members can be transparent without fear of backlash.
• Encourage active participation in discussions: Every director brings a unique viewpoint. The chair shoulder from all voices, especially committee chairs and key executives, creating a comprehensive understanding of each agenda item.
• Skillfully navigate challenging topics to find a common ground: Not all discussions will be easy. Some might be contentious. The chair's role is to guide these discussions constructively.

The chairman as coach

The role of the chairman in a board setting bears an uncanny resemblance to that of a coach in sports. Both are critical leadership roles that guide a group of highly skilled individuals toward a common objective. Much like a coach, the chairman sets the tone, facilitates discussions, and enables that the board operates cohesively. See A guide to effective board directorship: Lessons from sports

3. Nurture a diverse board

Diversity isn’t just a buzzword; it’s an asset.

• Aim for diversity in skills, experience, and demographics: A homogeneous board risks tunnel vision. The chair should champion diversity, using a plethora of perspectives.
• Recognize the value of diversity in decision-making and problem-solving: Varied backgrounds bring unique solutions to the table. The chair should highlight and leverage this strength.
• Work towards true diversity, beyond mere tokenism: Inclusion is more than just a numbers game. The chair should genuinely value and advocate for representation.

4. Structure effective committees

Committees play a crucial role in breaking down the board's responsibilities.

• Determine the necessary committees based on organizational needs: Be it audit, nomination, or remuneration, the chair should assess the right committees are in place.
• Appoint capable and experienced committee chairs: Each committee's success hinges on its chair. The board chair should carefully consider each appointment.
• Provide adequate resources and information to committees for them to function effectively: For committees to operate smoothly, they need resources. The chair should guarantee their availability.

5. Cultivate strong relationships with the CEO and executives

This partnership is crucial for organizational success.

• Build a foundation of trust and maintain open lines of communication: The chair should establish rapport with the CEO, fostering a relationship built on mutual trust and respect.
• Offer mentorship and constructive feedback to executives: As a veteran, the chair can provide invaluable guidance to the CEO and other executives, aiding their professional growth.
• Proactively address any concerns or conflicts between the board and management: Differences are natural, but shouldn't fester. The chair should act as a bridge, reconciling differences.

6. Set the agenda and engage the board

The board’s agenda is more than just a list; it's a strategic map for the organization's direction, and setting it right is crucial. The chair shapes that agenda.

• Actively collaborate in agenda-setting: Instead of relying solely on routine items, the chair should actively engage in shaping the agenda, so it reflects the organization's current needs and strategic aspirations.
• Seek input from committee chairs and the CEO: These individuals often possess unique insights into specific organizational areas. By actively involving them in the agenda-setting process, the chair tables critical issues for discussion, fostering a holistic perspective.
• Prioritize and timebox agenda items: Not all topics require equal attention. The chair should discern which issues are of utmost importance, allocating appropriate time for them. This means vital matters receive the depth of discussion they merit.
• Promote a flexible, yet focused, approach: While it's essential to stick to the agenda, there should be room for addressing unforeseen yet critical topics. The chair should strike a balance, allowing flexibility while managing productive meetings.
• Review and refine the process regularly: The effectiveness of board meetings can always be improved. The chair should continually assess and refine the agenda-setting process, incorporating feedback from directors and evolving organizational needs.

7. Manage board meetings effectively

Efficient meetings drive informed, strategic decisions.

• Prioritize a clear and concise agenda: Every meeting should begin with a well-structured agenda. This not only provides a roadmap for discussions, but also keeps the meeting anchored. It's the chair's duty to steer the meeting according to this blueprint, so every topic is covered while avoiding unnecessary detours.
• Promote an atmosphere of inclusivity: In a room full of voices, some naturally dominate while others recede into the background. The chair must encourage quieter members to share their insights. This involves reading the room, recognizing when someone is attempting to speak, and providing them the platform to do so.
• Gently manage dominating directors: While passionate discussions are welcomed, monopolization isn't. The chair should tactfully interrupt or redirect conversations when a director dominates, so there is balanced participation from all members.
• Stay on topic and curb tangents: It’s natural for discussions to occasionally stray. However, the chair should be adept at recognizing when the conversation is veering off course and tactfully bring it back to the agenda, so time is spent productively.
• Focus on actionable outcomes: Discussions without conclusions are unfruitful. The chair should emphasize actions, decisions, and follow-ups, so each meeting translates into tangible progress.
• Implement time checks and breaks: Long meetings can lead to diminishing returns in terms of productivity. The chair should be conscious of the meeting's duration, integrating time checks and, if necessary, short breaks to maintain the board's energy and focus.
• End with a clear summary and follow-up actions: Concluding the meeting with a recap supports clarity and alignment. The chair should outline decisions made, responsibilities assigned, and the roadmap for future engagements, fostering accountability and directions.

Document, track and follow up on board meetings

Precision in capturing discussions and decisions is paramount for board meetings. It fosters accountability, clarity and momentum. Just as a board meeting requires effective management, so does its aftermath.

• Opt for real-time minuting: Immediate documentation captures the essence of discussions accurately. Having a dedicated individual, preferably a skilled board secretary, to take real-time minutes can make a significant difference. The chair should periodically confirm essential points to check alignment.
• Highlight decisions and action items: Beyond recording discussions, emphasize decisions made and the subsequent steps to be taken. By demarcating these items distinctly, they become easy reference points for follow-ups.
• Assign clear responsibilities: Every decision or action item should have a name attached to it. The chair should distribute responsibilities explicitly, eliminating ambiguity about who's tasked with what.
• Implement a tracking system: Use digital tools or software specifically designed for board management. Such platforms can facilitate tracking of action items, set reminders for deadlines, and create an organized repository of past decisions and discussions.
• Schedule follow-up sessions: Rather than waiting for the next board meeting, the chair can set aside brief sessions to check on the progress of critical action items. This keeps the momentum going and addresses potential roadblocks early.
• Encourage directors to review minutes: Before finalizing the minutes, circulate them among directors for review. This not only delivers accuracy, but also reinforces the decisions made and the tasks ahead.

8. Engage stakeholders

The board chair serves as a vital link between the organization and its stakeholders, cultivating alignment, trust, and collaboration.

• Facilitate transparent communication with shareholders: Regular updates and open dialogues maintain alignment between board decisions and shareholder expectations. The chair should prioritize this two-way communication, recognizing the value of shareholder input.
• Nurture a proactive relationship with regulators: Staying ahead of the regulatory curve is key. The chair should advocate for regular consultations and proactive engagements with regulatory bodies, positioning the organization as compliant and collaborative.
• Champion employee involvement in decision-making: Employees offer ground-level insights crucial for strategy formulation and execution. The chair should actively interact with and engage them to gain valuable insights and foster a cohesive corporate culture.

Manage crisis situations effectively

Crisis is the true test of leadership.

• Develop and regularly update a crisis management plan: Forewarned is forearmed. The chair should champion the creation of a crisis blueprint, so to support preparedness.
• Clearly define the chair's role in various crisis scenarios: Clarity of responsibility is essential during chaos. The chair’s role should be explicitly outlined for diverse crisis situations.
• Lead the board and the organization with decisiveness and empathy during turbulent times: Empathy complements decisiveness. The chair should guide with heart and mind during challenging periods.

9. Advance board education and orientation

Knowledge is the cornerstone of informed decisions.

• Organize comprehensive orientation programs for new directors: Integration is essential. A well-structured orientation acclimatizes new directors, aligning them with the board’s ethos and objectives.
• Keep directors updated on industry trends, regulatory changes, and emerging risks: Industries evolve rapidly. The chair should guarantee that the board stays abreast of significant changes, to enable informed decision-making.
• Invest in continuous educational opportunities for board members: Encouraging ongoing learning means the board remains adaptable, innovative, and forward-thinking.

10. Implement regular assessments of board effectiveness

Reflection and introspection drive improvement.

• Conduct performance evaluations of board members and the board as a whole: Periodic evaluations give members feedback, fostering personal and collective growth.
• Review board processes and identify areas for improvement: Beyond individual evaluations, the chair should champion an assessment of the board's processes and dynamics.
• Leverage third-party evaluations for unbiased insights: Periodic (say every 3-to-5 years) external evaluations provide a fresh perspective, offering insights that might be overlooked internally.

In conclusion

The chair's role is akin to the conductor of an orchestra, harmonizing various instruments to produce a symphony. Beyond the gavel and the boardroom, they weave the tapestry of organizational vision, stakeholder expectations, and governance protocols. Embracing the ten areas elucidated above enables board to be effective and visionary. For organizations aiming for the zenith, a proactive and insightful chair is not a luxury; it's an imperative. As the guardians of organizational integrity, board chairmen must consistently hone their skills, understanding that their leadership shapes the destiny of both the organization and its myriad stakeholders.

Endnote: In some companies, especially within the U.S., the roles of CEO and board chair often converge, with a single individual helming both responsibilities. This configuration contrasts with the global trend towards an independent board chair. Given this variability, some of the recommendations in this article can be tailored to fit the context of a nonexecutive independent lead director, especially in organizations where the distinction between executive and non-executive leadership remains pronounced. Regardless of the title, the essence lies in effectively driving board performance and organizational success.

The views in this article are mine. The insights reflect an engaging and sparring discussion between me (as governance and risk expert, and accomplished author) and Open-Source AI ChatGPT (as know-it-all and so-so author). Copyright: Mark Watson