The chairman is a key position in a company’s board of directors, presiding over meetings, providing strategic vision, helping steer the company, and sometimes serving as a spokesperson for the whole organization.
In this article, we’ll take a look at the duties of the chairman of the board of directors, the importance of their role in corporate governance, and how this reflects on their regular activities.
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Chairman of the Board Responsibilities
The chairman of the board (sometimes also called president of the board) is above all a leader, a facilitator, and a communicator. Some of the key responsibilities of chairman of the board include the organization of board meetings, ensuring proper communication between the board and the Chief Executive Officer, and providing strategic guidance to the company as a whole.
Let’s look at these and other responsibilities below.
- Preparing board meetings. The chair sets the agenda, determines meeting frequency, etc.
- Presiding over the board of directors. The chair calls the meeting to order, determines if a quorum is present, announces when the board arrives at a decision, helps steer the meeting and keep discussions to the point, and enforces rules when needed.
- Providing strategic vision. The board looks to the chairperson as the leading figure in determining the organization’s long-term goals — its mission, values, and desired end results.
- Engaging with the CEO. The board chairperson acts as a bridge between the board and the CEO and other senior level executives, ensuring proper communication between the governance side (the board) and the implementation side (the CEO), and communicating with the executive committee as needed.
- Facilitating communication within the board. The chairman works to bring out the best value out of each board member, making sure everyone is heard and identifying what directors can make unique contributions to the topics at hand.
- Representing the company. Chairman of the board duties can sometimes include being called to act as an ambassador to the company, making public announcements, working with the media or with government officials, and protecting the company’s reputation through and through.
- Providing guidance to senior management. The chair provides guidance to ensure that company actions conform to its overall mission and values.
- Appointing sub-committees. Following board decisions, the chairman of the board can appoint audit, governance, or compensation committees, among others.
What are the main qualifications of a board chairperson?
Almost always, the chairman of the board already occupies a board seat before other board members or shareholders elect him or her to preside over the board.
Being the board chair requires playing several very different roles and entails a great degree of responsibility, as the chair exerts ultimate oversight over the board as a whole. As such, it’s a position that demands a very particular skill set — the chair should be a person of character, firm, stress-resilient, but at the same time also sensitive to the needs and voices of other board members.
Our experience shows us that successful board chairs invariably possess most, if not all, of the following traits.
For obvious reasons, the chairman of the board should be on top of his company’s industry and possess considerable experience and understanding of it. Drawing on this expertise, the chair is able to help formulate a comprehensive strategy for the organization.
Strong leadership and communication skills
The board looks to the chairperson for leadership. As such, the chairperson must have the ability to command respect — but also be an effective communicator, bringing out the best out of fellow board members and collaborating with the CEO and other senior executives as needed. Effective collaboration between CEO and chairperson is often a part of the executive communication plan.
Ability to manage and motivate people
Among the many interpersonal skills required of the chair are the ability to handle conflict and dissent within the board, finding solutions that can solve complicated situations to the company’s best interests.
The role of the board of directors chairman also includes effectively steering board meetings, including:
- Not allowing conversations to meander
- Making the best use of time
- Keeping everyone on the relevant agenda topics
- Enforcing parliamentary procedure and preserving order
High ethical standards and integrity
It goes without saying that the board chairperson should be an unequivocally dependable and ethical person. The board chair should remain uninvolved in petty squabbles within the company, never taking sides and remaining a voice of authority and reason even in challenging times.
Furthermore, it is vital that the board chair immediately disclose any conflicts of interest that might arise at any point.
Understanding of corporate governance and regulatory requirements
The chair must be able to leverage its understanding of corporate governance and regulatory requirements, including state and local regulations and industry standards, to guide board members in establishing transparency and accountability.
Board chairs should also keep abreast of relevant industry developments to help ensure the compliance and responsible governance at all times.
Ability to handle crises
As they say, it’s not a question of if, but when. Crises invariably arise, and when they do, the board chairperson must be able to take difficult decisions in a stressful and changing environment, without compromising what the organization stands for.
Between preparing and leading board meetings, constantly communicating with other directors and the chief executive, and helping represent the company to investors and the public, the board chair wears many hats and must have plenty of time available to properly fulfill each of his or her roles.
Although an oft-disregarded requirement, this can nonetheless make all the difference between an excellent board of directors and a poor one.
Challenges and opportunities a board chair faces
What really makes an outstanding chairman is how they deal with the many difficult issues they face in their role. These tough questions are a challenge, but often also an opportunity for a chair to show stellar leadership and set the company above the competition.
Below you can find three common such challenges.
Avoiding the urge to micro-manage
The board’s focus should be on end results, not on the means used to attain them. As such, the chair should be ready to identify when the conversation starts veering towards unproductive specifics or technicalities, and guide the discussion back to the general topics within its competence.
Adapting to change
In our experience, resilience to change is a key predictor of a company’s ability to survive and thrive in challenging and volatile market conditions.
As one of the chief architects of the company’s long-term strategy, the chairperson must be able to provide leadership in key comments, embracing the need for innovation and working with the board to identify opportunities even amid industry disruption and during economic downturns.
Working with the CEO
While the board provides strategy, the executive director provides actual implementation. This means the partnership between the board chairman and the chief executive is key to a company’s success. The chairperson should work to build a strong, positive relationship with the CEO, collecting the CEO’s feedback on specific agenda points and keeping him or her well-informed of board deliberations and decisions.
Difference between chair and CEO
Although the role of chairman of the board and CEO position may sometimes coincide on the same person, they are entirely different and the responsibilities that befall each function should be clearly defined.
The board chairperson, as seen above, presides over meetings and works in the sphere of the company’s general governance. Strategy, vision, and long-term planning are all within the chairman’s purview.
The chief executive, on the other hand — and as suggested by their title, — deals with execution and implementation of a company’s operations on a daily basis. Even though the CEO is engaged in a company’s long-term plans, their proper sphere is direct management, rather than overall governance.
These differences are illustrated in the table below.
How board portals can help the chairman of the board role
Staying on top of all the communication and information flows involved in a board leadership role is never easy, but the tasks facing board chairs can be simplified considerably with the use of the right tools.
Over the past few years, board portals have become an essential tool that helps board directors and chairs in a variety of ways, including:
- Preparing and following up on board meetings
- Organizing and distributing the meeting agenda
- Taking and storing meeting minutes
- Generating committee reports
- Sending out RVSPs and other materials
- Conducting votes or polls
- Storing and sharing sensitive info securely
With the ability to generate reports, graphics, and other analytics, portals are also extremely useful for tasks such as conducting audits or conducting a board succession planning process.
The best providers of board portal software possess a number of certifications, such as ISO 27001, SOC-1 and SOC-2, and are HIPAA and GDPR compliant.
It’s easy to see that the many chairman of the board roles and responsibilities are extremely significant in their impact on an organization’s success.
Chairman of the board duties and responsibilities include providing strategic planning, conducting meetings, and collaborating with the chief executive to ensure company actions are closely aligned with good corporate governance.
At the end of the day, a company can either rise or fail on the leadership provided by board chairs. Make sure your organization is well prepared — and has the tools to get the job done.
What does the chairman of the board do?
The chairman’s primary responsibility is presiding over board meetings, as well as working as a link between the board of directors and the chief executive and helping provide strategic vision to the company. In many companies, the chair can also be tasked with representing the company before investors and other stakeholders.
Is there a term limit for the board chair?
In most legislations, there isn’t a pre-set term limit for the role of chairman, although some do require that terms be agreed on. This means the question is usually left to be decided by the organization’s bylaws. The US-based National Association of Corporate Directors (NACD) recommends a 10-15 year as a best practice term limit.
Are the CEO and the chair of the board usually the same person?
Most often, the CEO and chair roles are charged to different persons. This is considered a good practice, since there is a clear-cut difference between what is expected of the CEO vs. the chairman of the board of directors responsibilities. When the same person does play both roles, a lead director is usually appointed to assist and stand in for the chairperson when necessary.