LEADERSHIP INSIGHTS

A good Chair will provide invaluable support to both the CEO and executive team. Without stepping on toes, they should be able to draw on their own experiences to provide insight and advice, while also having the discipline and expertise to make sure that the organisation operates with integrity.

It is a position that is becoming evermore complex. Alison Bennett, Senior Relationship Manager at Criticaleye, comments: “The reporting burden on boards shows no sign of abating. From a Chair’s perspective, they need to ensure that each meeting is well planned so that deadlines are met and various risks assessed thoroughly.

“However, perhaps the biggest challenge for a Chair lies in carving out the time for executive and non-executive directors to look beyond the four walls of the boardroom. The ability to reflect on the existing business model and what may need to change to stay competitive is absolutely vital.”

Here, Criticaleye speaks to leaders to identify five areas a Chair needs to focus on if they’re to perform at the highest level:

 

Setting the Tone

An effective Chair will understand the need for structure, process and time-management. At the same time, they’ll have a keen sense of how to get different personalities to engage. Debbie Hewitt, Chair of Moss Bros Group, says: “It is non-negotiable that a Chair has the strategic capability, insight and other technical skills, but what often makes the difference between good and excellent is the Chair’s ability to influence and get a diverse group of people to be able to work together to add value.”

Joëlle Warren, Executive Chair at search firm Warren Partners, comments: “The Chair has to make sure that everyone can contribute and that everyone can be heard. Sometimes, I describe the chair role as being a bit like the conductor of an orchestra.

“You’ve got to look at the nuances of the score, which in this case is the board agenda, and then you’ve got to bring out even the smallest piccolo section and give it air-time.”

Marc Reuss, former Exec-VP and Chief HR Officer of medical products and technologies company ConvaTec, adds that “of course the Chair has to ensure the company’s management is sound and following the strategy, but overall they need to offer a sense of stewardship”.

 

Navigating the Relationship between CEO and Chair

If the CEO and Chair are to work together effectively, it’s advisable to set out expectations around behaviours and responsibilities early.

Gary Browning, Chair of Corndel and Eton Bridge Partners, states that when he was formerly a CEO he would ensure there were no shades of grey in the relationship. He recalls telling a Chair that their specific role was to either give him a bonus or fire him and that they shouldn’t do anything else. “I was being trite, but what a chief exec does not want is someone who interferes all the time,” he states.

A lot will depend on the performance of the business, but it’s evident that if a CEO feels undermined by their Chair, it’s going to cause problems in both the boardroom and the wider organisation. Gary adds: “A CEO should be able to test ideas out on the Chair, who can then push back on and challenge those ideas.

“The biggest thing of all is to have a supporter in the Chair, until the day when they don’t support you, and that is the day that you part company.”

Marc says: “A good Chair will be able to objectively assess situations and have the self-restraint to avoid an operational role. They should be supremely confident, understand all aspects of the business and use past experience to support the company.”

In short, they’ll keep their ego under control, but they’ll also have the wisdom to know when to step in. Joëlle of Warren Partners says: “A Chair must have the ability to see through complex issues quickly. They will know when to extend the decision-making process and when to cut it short. They should also know who to bring into the boardroom to help make a decision.”

It comes back to having a sense of control. Debbie comments: “You never run out of things to put on a board agenda, but really effective Chairs are very clear about what the priorities are, and they are able to manage the meetings so that the right things are addressed at the right time… Governance is important; it is the backbone of what the board does, but you should not let it dominate the agenda.”

 

Making Succession a Priority

Succession can be a tricky subject. To avoid making future talent a taboo, it's again advisable to get it on the table early so that the CEO and senior leadership team do not feel undermined by discussions about their successors over the medium to long-term.

Marc says: “The HR Director shouldn’t have to push to ensure that this is on the agenda. The first thing to do is look to the board. The Chair and the HRD should have formed an opinion on who has the right set of skills to succeed in a role, and they should act on their conclusions.”

 

Getting to Grips with New Tech

The gap in knowledge among non-executives about new technology is increasingly a source of tension on boards. It can seriously hamper investment decisions around innovation, as well as on upgrading existing IT infrastructure.

According to Debbie, Chairs who were CEOs some time ago have little experience of today’s tech disruption: “As Chair, you need to understand what the skill requirements of the future are going to be. You must create diversity of thought around the table; bring in a group of people who think differently and are able to interact in a way that generates value.

“The Chair of the future must think in a much more creative way about how they add diversity and not expect that it comes from slavishly following a corporate governance rule.” 

Gary broadly agrees with the term-limits for Chairs which have been suggested in the revised UK Corporate Governance Code: “We are moving at such a speed today that remaining fresh for long is impossible. This is certainly something that I wouldn’t have said eight-years ago, but the pace of change is redefining the role of the Chair.”


Plc vs PE Chairs

There are plenty of Chairs who will have sat on both Plc and PE boards. In order to do this, they will often have to switch their style as their focus will invariably be different.

Debbie explains: “The Chair’s role is typically more clearly defined in a listed company. You have a much broader investment community to work with, not just the fund managers but the governance teams too.”

By contrast, she argues that the role of the PE chair is often narrower due to the smaller number of investors: “It can end up a binary position, whereby the executive either get on with the PE owners or [they] don’t, and if there is tension then it is often the role of the Chair to facilitate a resolution.”