• Categories: Chair
  • Author: Graeme Nahkies and Terry Kilmister
  • Published: Jul 2, 2023
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Without an effective chair, all bets on the adequacy of board performance are off. This has been our consistent observation of the hundreds of boards we have worked with over the last 30 plus years. We are even more certain of this as performance pressures on boards have increased over that time.

Board chairs now need to manage a wider range of demands, do so more capably, and commit more time to their responsibilities than their predecessors of the 1980s and earlier, when governing boards, a constitutional necessity, were often little more than window dressing. Today boards must be a fully functioning component of organisational structure expected to lead, rather than be led by management.

This evolution has many implications, not least for the expectations we have of those who lead our boards. A recent consulting assignment has prompted us to take stock of today’s expectations of board chairs.

In our view, the role of board chair and performance in the position has never been so important. So we seriously question the oft-quoted maxim that a board’s most important job is to select its organisation’s chief executive. As a board must be in good shape to make that selection, the first ‘cab off the rank’ should be the (very) careful selection of the board leader.

The logic for this is simple. The board chair is responsible for setting expectations of board and director effectiveness and for following through, ensuring that good governance practice is applied and maintained. And—if that is inadequate—doing something about it. Boards cannot realistically expect high standards of executive performance unless they apply a comparable standard to themselves. The chair must often be the most active advocate for, and manager of, a high standard of board performance.

From that proposition, the following expectations of performance in the board chair role flow.

Setting the standard

The board chair should have the respect of fellow directors, with moral as well as positional authority. This is likely to mean that the chair:

  • is fully committed to the purpose of the enterprise and to seeing that the board has articulated the outcomes and, in turn, guides all organisational effort and activity
  • understands the organisation’s constitution and the powers and responsibilities of the board 
  • can confidently articulate the gist of governance policy, board-level planning statements and the key legal obligations of the board and the organisation
  • consistently acts as a role model for other directors in fulfilling their legal and moral obligations
  • is fully conscious of and accepts the additional demands of the role compared to other directors
  • is always as well or better prepared than any other director when it comes to addressing the most important challenges facing the board
  • is willing to seek feedback from boardroom peers and acknowledge that success in the role requires humility and constant learning. Chairing a board is an artform that takes practice and the capacity to reflect on performance in the role.

Getting the board’s work done

Much, if not most, of the board’s work gets done in formal meetings, even when preliminary consideration by board committees is common. How effective the chair is at planning and conducting board meetings is, therefore, central to a board’s performance.

  • The chair is responsible for ensuring the board makes the best possible use of its limited meeting time—not just influencing the content of the next meeting agenda but having a clear sense of what the board should be dealing with over a longer time period. Compliance obligations must always be attended to, but boards typically report dissatisfaction with the time allocated to longer-term (‘strategic’) thinking. The chair should ensure there is a suitable balance, usually through developing and maintaining a board workplan.
  • The chair will take the lead in preparing the agenda and be clear about the appropriate sequence, allocation of time and objective of each agenda item. The board should expect the chair to develop an agenda with items ordered according to their relative priority for the allocation of board time and attention. Start with the most valuable items for consideration to ensure these are not rushed or deferred because of time constraints.
  • An effective chair will start each meeting with an overview explaining its overall shape and highlighting the key outcomes sought. This can be even more effective set out in writing before directors begin their meeting preparation, showing them where to focus their attention.
  • During the meeting, the chair will set the scene for the board’s consideration of each agenda item, giving any context (eg, reference to a past decision or board policy) that justifies the board’s interest, and proposing the starting point. After indicating their initial thoughts about the kind of attention the item requires from the board, the chair may ask directors about any contributions they wish to make to the board’s consideration of the matter. At this stage, an effective chair will only rarely advocate for their own preferred outcome because it might deter colleagues from expressing alternative points of view. [1]
  • The chair will draw directors and relevant staff into the discussion needed to make the most of the board’s attention. An effective chair will be familiar with the interests, skills, knowledge and experience of every director and, like the conductor of an orchestra, can draw on these as appropriate.
  • The chair facilitates the discussion, steering it while maintaining focus and moving towards consensus or whatever other conclusion is appropriate. The chair aims to ensure a matter is fully explored, without meandering or drifting off the subject. A particular challenge is for the chair to keep discussion at the level relevant to the board’s governance interest in the matter.
  • The chair ensures that all directors can contribute to the dialogue, even those who have not spoken previously. This ensures that valuable opinions or suggestions are not lost because a thoughtful, but less confident or assertive director has not yet found a place to enter the discussion. The chair also draws out directors whose silence may indicate a fundamental disagreement with the way the collective thinking has been revealed. For cues when this might be needed, effective chairs pay close attention to directors’ body language.
  • Divergent thinking and disagreement—testing ideas—are critical for effective decision making and productive board dialogue. The chair must encourage a contest of ideas while ensuring this does not lead to a conflict of personalities and the board’s discourse is always civil and respectful. All directors must be satisfied that their views have been heard and given genuine consideration, even if their preference does not win majority support. Given the board’s collective responsibility, all directors should honour a commitment to ‘speak with one voice’ once a decision is made—even if by majority vote. Sometimes, however, the chair must be able to judge that the board is not yet ready to decide, that the risk of a divided board is too great, and call time on the matter, at least for the time being.
  • Usually, when sensing the board is ready to decide or otherwise conclude a discussion, the chair will sketch out the probable conclusion and seek confirmation that a consensus has been reached. The chair’s summing up should be clear and concise enough to be properly recorded in the meeting minutes.

Managing board dynamics and director performance

The chair’s position is a position of some authority and significant responsibility as it relates to overall board performance.

  • As the board leader, the chair sets the boardroom culture and ‘tone’, demonstrating appropriate behaviour both within the board, and between board and management, and board and external stakeholders. The chair’s character, ethics and relationship management capabilities are all closely observed and interpreted.
  • Few chairs have total control (or any in some cases, eg, fully elected boards) over the composition of their board and even competent directors are not always fully ‘on the ball’. So, the chair must occasionally remind directors of their obligations and deal with performance shortcomings.
  • The chair should ensure that the board routinely evaluates its composition and its own effectiveness. Poor selection and succession planning are often root causes of board inadequacy and dysfunction. Chair succession planning is more important than for any other board position but is often the most neglected.

Managing the board/ chief executive interface

The chair and chief executive work together to ensure an effective interface between the governance and operational arms of the organisation. They are their respective ‘team leaders’, so regular contact between the two is likely.

  • A challenge for both chair and chief executive is to ensure they do not become ‘a team of two’—an ‘A Team’ that relegates remaining directors to a rubber stamping ‘B Team’. The chair’s link with the chief executive needs to be close enough to build trust, but not so close that objectivity is lost or compromised. The board is the employer, and the chief executive has a performance accountability to fulfil. To maintain a professional relationship, the chair and chief executive should ideally avoid becoming close personal friends beyond the working environment.
  • As the chief executive’s employer, the board is obliged to be a ‘good employer’ and see to it that its employee has the protection accorded to him/ her by relevant legislation and a formal employment agreement. The chair has a key role to play in ensuring there is safety and integrity in the employment relationship.
  • While the chair should avoid becoming the ‘editor-in-chief’ of board meeting papers, they have a valuable quality control function. Ideally the chair should be able to review the board meeting pack prepared by staff before it is distributed to directors, so papers that aren’t yet ready to support the necessary board engagement can be revised or withdrawn. To give directors plenty of time to consider meeting materials, the chair should also decide if late papers are acceptable. These should be held over until the next meeting unless there is a sound reason for their lateness and a pressing need for the matters they contain to be dealt with.
  • In board meetings, the chair ensures that staff present can contribute when their advice, information, expertise or opinion is required. However, they must also ensure that this doesn’t happen at expense of director ‘air-time’. Board meetings are not the place for staff to have free rein to join in the board’s dialogue.

None of this means that the chair is the ‘boss’ of the board or of the chief executive. As a ‘first among equals’, if they are elected by the board it is usually on the assumption that they will be the most capable of leading the board and ensuring it plays its proper part in organisational leadership and stewardship of the enterprise. The role is one of servant leadership. The chair supports the board to perform its proper functions and to be as effective as possible in their discharge. Just as there is no perfect chief executive, there is no perfect board chair. But given the importance of the role, it is a reasonable expectation that chairs will aspire to carry out the role to the best of their ability.

 

Note

[1] The board should understand the chair’s thinking on important matters, but this should rarely be the first contribution to the discussion, and never expressed in a domineering or controlling manner. Sometime a chair, because of experience and expertise, may be convinced they are right. And other directors may be similarly convinced about the rightness of their own, differing, position. The chair could then advocate strongly but their job is to help the board reach a decision that directors can support. Chairs, therefore, must be wary about the potential for the misuse/overuse of their positional authority. The collective responsibility (and wisdom) of the board should always be a primary consideration and, in most cases, the chair has only one vote.