Frank Lewis serves as a Chair and non-executive director for listed and unlisted companies. Drawing on his experience, in this guest blog he lists the attributes a Chair should possess.
The role of the Chair
The role of the Chair has become much higher in profile and the expectations have increased as, quite rightly, stakeholders now expect an engaged, energetic and involved Chair who does more than simply manage the corporate governance process.
The success of a Chair undoubtedly hinges on the relationship between the Chair and the Chief Executive, a relationship which should be centred on honesty, trust and transparency. The success of this relationship is based on mutual understanding by both parties of the distinction between their two roles.
An effective Chair
An effective Chair must have an extremely good knowledge of the business they are chairing: they must know enough to ask the right questions, and must provide a constructive level of challenge to the chief executive. One of the main faults of a Chair deemed to be ineffective is their failure to comprehend that they are not there to run the business and that their role is instead to support and guide. In simple terms, the job of the Chair is to ensure that the business is well run and not to run the business.
There is, however, a fine line to walk between being too involved and being too remote. This means the Chair should devote the appropriate level of time to their role, which means visiting operations, talking with staff and customers, as well as investors. The best Chair is able to develop an empathy with the business and engage with its people and issues. But there is no ‘one-size-fits-all’ prescription for an effective Chair and the right level of engagement will vary depending on the company’s stage in the business cycle, competitive environment and the experience of the chief executive.
What ultimately defines a good Chair is the ability to run an effective board and to manage relationships with both shareholders and stakeholders.
The qualities of an outstanding Chair are:
- Charismatic personality
- Good communicator and listener
- Clear sense of direction
- Strategic view – the ‘Big picture’
- Allow chief executive to get on with their job
- Good at governance
- Broad experience
- Business acumen
- Able to gain shareholders’ confidence
- Able to get to the key issues quickly
The role of the Chair in an initial public offering (IPO)
The appointment of the right Chair is key for a business wishing to IPO. A good Chair would greatly enhance the prospects of a successful IPO by building an effective board and calling on their years of experience to ensure the story a company sells to the market is both compelling and real.
It is also the Chair’s task to set the tone at the top and to say what they want the organisation to be, establishing good governance and making sure the business has the right corporate reputation in its community.
In conclusion, a Chair has done their job when the ‘vision for the business’, as set out and presented in the strategic plan to shareholders and stakeholders, has been achieved.
In our next post we’ll be reviewing a text book example of how not to be a good Chair…