EDITORIAL: THE IMPORTANCE OF THE ROLE OF THE CHAIR

The role of the chair is a critical but frequently underrated element of value-creating boards. As Kit Bingham, head of CEO and board director practice at Heidrick and Struggles, says in one of our reports this month ‘The role of the Chair has been greatly professionalised and now occupies a central role in the governance and leadership of a company. It is a heavily scrutinised position, now requiring a real investment of time, energy, and effort. And it is one for which more boards are reaching far beyond traditional sources.’

An effective Chair has a strong relationship with the CEO. It is vital to be close but not too close. The Chair needs to be able to step back if needs be and the ultimate sanction for an under-performing CEO is to fire them.

Many examples of governance failures can be traced back to problems with either a weak Chair subservient to an overbearing CEO or a weak CEO allowing a non-exec Chair to operate in a quasi-executive manner exerting too much control.

Good governance suggests that the Chair and CEO should document the separation of accountabilities between these two critical roles. The discussion to create this document is often the most important step to flush out frustrations and find ways to improve this crucial relationship.

One of the other points Kit makes in the report is that aspiring Chairs should be sure to test their motivation. The role carries many of the challenges, frustrations, and exposure of the role of a senior executive for a fraction of the reward. ‘You need to really want to do it,’ said one Chair Kit spoke to.

In the words of one chief executive turned Chair also quoted in the report, ‘Be really clear you are giving up your executive career—if you still want to be an executive, don’t do the Chair role, because you’ll be a pain in the backside. Work your “CEO-dom” out of your system.’