The Chairman plays an important role in a Company. The Chairman’s main duties include chairing meetings of the Board of Directors, setting meeting agendas in conjunction with the Company Secretary, managing and providing leadership to the Board of Directors, and acting as a direct liaison between the Board and the Company’s management, through the Chief Executive Officer.
What ultimately defines a good Chairman is the ability to run an effective Board and to manage relationships with both shareholders and stakeholders.
Below are some of the key qualities that make an effective Chairman:
1. Ability To Chair Meetings
Boards of Directors meet only a few times a year, but they make decisions that define the organisation’s destiny for years to come. The ability to manage those meetings effectively is key. Chairmen must ensure that all the business is discussed in line with the agenda, that everyone’s views are heard and discussed, that clear decisions are reached and accepted and that they follow up to make sure agreed actions are carried out in line with Board decisions.
2. Understanding The Business
An exceptional Chairman understands the business, its culture, people and processes. They also understand the wider industry and prepare the Company for all eventualities. Experienced Chairmen can quickly identity opportunities and potential risks facing their organisation. They can engage with their Boards at an early stage to discuss potential courses of action.
3. Ability To Influence Others, Without Dominating
A good Chairman is responsible for ensuring that all Board members are using their own unique skills for the good of the organisation. They must ensure all Board members contribute to discussions and the decision-making process and they must allow each Board member to express their views, even if they conflict with the Chairman’s view. Developing effective communication with Board members is key. An exceptional Chairman is careful not to allow their own personalities to dominate. They are willing to be challenged on their own views and enjoy open debate.
4. Strong Personality
The role of the Chairman is a difficult job. They have ultimate responsibility for Board performance. A good Chairman gives strength and support to others while being resilient themselves. This requires a strong personality. Even the most experienced and effective Boards can face challenging times and the ability of the Chair to deal with these situations and to bounce back is essential to a Company recovering and moving on.
5. Good Communication
One of the exceptional Chairman’s secrets of success is effective communication with all stakeholders. Through effective communication, the Chairman gains the confidence of their Board of Directors and provides clarity in the boardroom. The Chairman’s ability at communicating Company strategy to external stakeholders and giving stakeholders confidence in the Company’s future direction will help keep external pressures at bay. They will also stand up to shareholder pressure, if necessary. An effective Chairman does not lose sight of his main priority of improving the long-term performance of the business.
Inadequate leadership and governance contributed to the underperformance and failure of major companies during the economic crisis. The role of the Chairman has become even more important. The current environment places greater responsibility and a higher profile on the Chairman. Recent events have shown how, when things go wrong, the Chairman can be first in the firing line.