LEADERSHIP: THE ROLE OF THE CHAIRMAN

Published: 2010-03-08   please add a comment below

Boards get a lot of flack and it's not surprising. They're the shareholders' representatives. And, in corporate crashes (think Enron or Royal Bank of Scotland), boards are often judged as having been inadequate or worse. But the issue is broader. Even boards of successful companies (and not-for-profits) are frequently seen as not adding sufficient value. So, what's the problem? From personal experience of doing governance reviews, I believe it's more about board leadership and hence operational effectiveness; less about the issues of individual or group honesty and independence, which tend to attract the headlines and legislation.

A board doesn't run the company. That's the job of the CEO and management. But, the role of the chairman in running the board is leadership like any other. He or she has to:

• Decide vision and strategy - on the basis of management's analysis and advice;
• Ensure there's role clarity for the board and its members;
• Build its energy and drive so there's an appropriate work ethic;
• Establish a culture balancing open debate with effective cooperation;
• Supervise its review, planning, risk-management and decision processes;
• Ensure management provides information that's timely, adequate and accurate;
• Engender constructive teamwork internally and with management;
• Ensure renewal of both membership and operations.

For an executive chairman, a key challenge is separating his or her executive and board roles. For a non-executive chairman, it's more about the subtlety and skill of managing a part-time body, where many colleagues may be ex-CEOs struggling to limit themselves to a non-executive role. Some may also be chairmen elsewhere and used to calling the shots. And, others sadly may be passengers or worse.

As mentioned earlier, the chairman's leadership duties differ in degree not kind from those of other leaders. So try these three questions. As a chairman (or executive!), how would colleagues rate you on each of the tasks above? Where and how would they suggest you improve? And finally, what are you going to do differently?

Dr. Timothy Pascoe AM
PhD (Cambridge), MBA (Harvard), BE & BEc (Adelaide)
Creator, V|E|C|T|O|R Leadership^®