Role of the Chair

The role of the Chairman of the board of company directors

A handful of very public cases bought against company directors have shown us that the Chair of the board of directors may have, in particular circumstances, special responsibilities over and above those of other non-executive directors.

To further understand what the board Chairs’ role, responsibilities, and expectations are I’m sharing a position description for the Chair of the board that I recently prepared for one of my boards.

The Chair is considered the “lead” director and utilises their experience, skills, and leadership ability to facilitate the governance process. The Chair’s role operates across two areas: in the boardroom and outside the boardroom. The below sample position description details all of the tasks with these two areas.

The position description also includes expectations in addition to the above duties and responsibilities. These are included in all director position descriptions, not just the Chair’s, and focus on ensuring continued active board participation that is in the best interests of the company and its stakeholders at all times.

A director code of conduct – which is mirrored in the Board Charter – and director performance metrics round out the position description. Again, these elements are included in all directors’ position descriptions.

Sample Chair Position Description

From my experience, a great Chair is vital in the effective operation of the board and success of the organisation. The opposite is also true; a bad Chair can break a business. The saying “the fish rots from the head” is testament to the way in which a dysfunctional board can be the demise of great organisations, and reinforces the need for a highly functioning, highly effective group of company directors working in the best interests of the organisation as a whole.

What has been your experience with board Chairs?

 


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11 Comments
  • Is it possible for a board to have co-charmen or joint chairmen? I can not find anywhere where this seems to be precluded, but I also can not establish if this exists in business.

    • Hi Richard,

      Great question! Like you have said, there is nothing that precludes a board from doing this. However, my initial thought (note: not formal advice) is that it could cause some issues in relation to determining who is really in charge; particularly if anything is brought into dispute – legal or otherwise. For this reason I would really encourage any board to strongly consider if it is really necessary that a ‘joint chair’ structure is established. Consider utilising a Vice Chair or Deputy Chair as a stand-in for when the Chair is not available (for whatever reason). This is so the leadership structure is really clear and removes ambiguity in relation to who is the Chair. Another type of structure that some boards use is to allocate specific ‘areas of responsibilities’ (or ‘portfolios’) to particular board members – usually centred on their area of expertise.

      I hope this has provided some additional considerations for you. If you need personalised advice for your board’s particular situation and requirements, I encourage you to seek appropriate professional and/or legal advice.

      Thanks for stopping by,
      Lisa.

  • I completed Corporate Governance during my MBA studies recently. Surely I don’t need to complete AICD at $6,000?
    Thanks
    Ian

    • Hi Ian,
      You’re right. You don’t need a qualification or minimum specific education to join a board. However, you do need to continue your education and development on a board and as a director; much like a lawyer, doctor, or accountant requires ongoing professional development to continue to operate as such.

      There are many providers (us included) that offer director development options are a little more affordable, particularly for volunteer directors. I recommend figuring out what your development needs are, searching around, and finding a provider that best meets your needs.

      Reach out if you need further information Ian.

      Lisa.

  • The provided role of the chair is comprehensive. However I have the following clarity regarding chairman/ vice chairman relationship:

    It is known that a “Vice/ Deputy Chairman” of a company’s Board shall take over the “Chairman’s” roles and responsibilities when the latter is absent. In light of that and from the perspective of Best Practice:

    1- When is the Chairman regarded to be absent?
    • Is it when he/she can’t attend a certain Board meeting only?
    • Or does it apple when he/she is leaving the country irrespective if there is a scheduled Board meeting during the leave?
    • Would still apply if he/she is reachable on his email/ phone for matters arising between meetings? (such as Agenda preparation with Board Secretary/ circular resolutions….etc.)
    • Or does absent mean that he/she simply can’t carry out the duties of the chairmanship regardless of his/her whereabouts?

    2- Is the Chairman obligated to inform the Board/ Board secretary that he/she is leaving the country?
    • If yes, does it only apply if there is a meeting to be held within the leave period?
    • If yes, is there a formal procedure to follow? Should there be a form of authorization/ delegation from the chairman to the vice chairman?

    • Thanks for your questions Asma. I will respond one-by-one the best I can.

      1-When is the Chairman regarded to be absent? When they are not at the meeting or ‘attending’ via phone or video call.
      • Is it when he/she can’t attend a certain Board meeting only? I would imagine it’s any meeting where they are the Chair of that meeting.
      • Or does it apply when he/she is leaving the country irrespective if there is a scheduled Board meeting during the leave? If they are unavailable during a certain time period I would imagine that they would hand over any duties required of them during this time to the Deputy/Vice Chair.
      • Would still apply if he/she is reachable on his email/ phone for matters arising between meetings? (such as Agenda preparation with Board Secretary/ circular resolutions….etc.) That’s up to the Chair. They should have an understanding if they are able to effectively discharge their duties and responsibilities as a Chair and Director during their time away. If they are not able to do that they should take a formal leave of absence regardless of wether there is a scheduled board meeting (or any other meeting) during that time.
      • Or does absent mean that he/she simply can’t carry out the duties of the chairmanship regardless of his/her whereabouts? See above response. Also, look at the organisation’s constitution for guidance on this. The constitution prevails here.

      2-Is the Chairman obligated to inform the Board/ Board secretary that he/she is leaving the country? Depends on the organisation’s constitution and/or board charter. I would imagine it would be prudent for them to advise the secretary at a minimum that they are away. It depends on many factors though.
      • If yes, does it only apply if there is a meeting to be held within the leave period? Not necessarily. I responded to this point above.
      • If yes, is there a formal procedure to follow? Should there be a form of authorization/ delegation from the chairman to the vice chairman? Again, check the constitution, board charter, and/or delegations policy and/or schedule. There may be a ‘formal’ process to follow in relation to taking leave from the board. And I would imagine that the Deputy Chair is, for all intents and purposes, the Chair during the Chair’s absence and therefore adopts the Chair’s delegated authorities as agreed to by the board.

      I hope this information helps!

      All the best,
      Lisa

  • Hi Lisa

    If the Chair is not willing to chair board meetings and there is a vice chair does that person automatically assume this responsibility? Can any other Director request to take on this role or is it the Vice Chair’s responsibility ? Thanks

    • Hi Kim,

      Thanks for your questions. In general, yes. The Vice or Deputy Chair takes over chairing of the meeting if the Chair is unavailable or unable to chair the meeting. Depending on your constitution and/or board charter, if both the Chair and Vice/Deputy Chair are unavailable/unable to chair the meeting, the rest of the board members would vote on which of them will chair the meeting.

      All the best,
      Lisa

  • Hi Lisa

    One other question, our board meets at a board directors house but 2 out of 5 of us are not comfortable with this arrangement and think it would be more suitable to meet at our community centre as its neutral and more conducive to getting on to board business. We voted on this and it was 3-2 for the house. It just seems like a meeting place should somewhere that everyone is comfortable. Is there any legal reason we can use to challenge this arrangement ? Thanks

    • Hi Kim,
      I understand your perspective here. Again, refer back to your constitution and/or board charter in relation to decisions and whether they need to be majority or unanimous to pass/be accepted. I agree about holding meetings where people feel comfortable and don’t feel it’s unreasonable to suggest a different venue. As for legal challenges, I would suggest finding a suitable lawyer to assist with your query. Before it gets to that stage, I would recommend having a candid conversation with the Chair (away from the board meeting) to discuss your concerns and offer workable solutions (such as holding every other meeting at the community centre). If you have already done this and are now considering legal courses of action, I would be reevaluating whether being a member of this board was in your future. I hope this helps. Good luck with whatever option you choose.
      Lisa.

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