Before going into the details of the specific traits of a great chairperson, it is important to understand what the role of a chairperson is and isn’t.
The chairperson should be the leader of the board; the leader of a team of equals who works closely with the leader of the operational team (CEO or MD). The two roles are very different in their approach. The MD/CEO is the leader of a hierarchy, and the chairperson is the leader of a team of equals.
What the chairperson role is not, is a demonstration of power. It should not be a place of ego. The role shouldn’t be seen as more influential than other roles, or as an authoritarian role. It must be seen as a role with more asking than telling; the chairperson must be someone who works together with everyone else and brings the best out of them. The desired leadership style is very much that of servant leadership i.e. leading from behind and encouraging questioning that is challenging.
This leads to the first key quality of a great chairperson that can make a huge impact on the effectiveness of him or her in the role.
Maintain Independence
True independence serves any chairperson well. And by “independence” I mean the true definition of the word where they are not a shareholder, part of management, or friends with the founders; they have no marital or family connection to anyone else in the organisation; they’re not consulting to the organisation; and they have no other form of remuneration from the company other than their director fees. In other words, they are truly independent of thought.
This is so important because if you are going to lead this team of equals – this mix of executives, non-executives and ideally other independent directors – you need to make sure that you are not caught up in the emotions of thinking with a shareholder hat or a management hat, or putting relationships first instead of only putting the company first.
The chairperson must be the leader of the team that puts the company and the company’s best interest above all else.
Lead with Accountability
The board’s role is to own the strategy of the organisation, to demonstrate leadership in championing the strategy and living the organisational values, and to be the champion of good governance.
From a fiduciary duties’ perspective, directors also need to demonstrate that they have taken care, learned and applied the necessary skills, and been diligent in the execution of their decisions. It is therefore critical that the chairperson leads from the front in these aspects and holds the other board members to account for doing the same.
At board level, actions often have far more impact than words. Stakeholders both inside and outside of the organisation quickly pick up if leadership is not being demonstrated at board level, and it becomes much more difficult for managers lower down in the organisation to hold their teams accountable if it is not being demonstrated at the top.
Build Consensus
A critical part of leading the team of equals is minimising voting, which requires the chairperson to have the ability to build consensus. While we want to make sure that everybody has been heard, that all objections and opportunities have been considered, and that consensus is reached about the way forward, board members often leave the boardroom without speaking with a unified voice. All board members must consistently portray what has been decided on to anyone outside of that boardroom so that the discussions, dissent and objections remain in the boardroom. With everyone on the same page in terms of what needs to be achieved in the best interest of the business, true performance is possible.
Leverage Wisdom and Experience
Inspiring confidence in board members and holding them to account requires a chairperson who is seen as wise in the ways of business and who can demonstrate some experience in the role of chair i.e. they’ve “been there, done that, got the T-shirt”. They may have led a team, or led or founded a business, and have a broad understanding of all of the different components of a business. They understand how marketing works, the importance of having proper systems in place, the value of a reliable and consistent sales team, and the running of the operations, logistics and mechanics of the business.
They don’t have to be an expert in any of those areas in particular, but they absolutely must have a very good understanding of all of the moving parts that make up an effective business. They also need to understand and have had experience in the governance of the business which means that they must have served on some kind of board before.
If you wish to develop your skills and move into chairperson roles, it is a good idea to serve on as many boards, or committees, as you can manage. Nothing beats experience and the typical four meetings per year that many boards have is going to build experience VERY slowly.
From a self-development perspective, it is also very valuable to get into the habit of going through a self-reflection exercise after each meeting.
Be Calm yet Fearless
This element is linked to the above. The more experience and self-awareness one has, the calmer and less fearful one will be. Independence also helps significantly because, as we mention often in Sirdar’s training and webinars, a key component of being a high-performance director is being able to have difficult conversations.
A chairperson gets the most out of everyone by being able to hold a space of calm discussion in which everybody has the opportunity to speak their mind honestly without being put down or their ideas being diminished. It’s critical to be calm and fearless while asking the difficult questions in that space to get the best possible outcome for the company and the best value from the individuals sitting around the boardroom table.
Follow a Methodology
Everything is made that much easier in any process if there is some kind of defined methodology; something written down that defines the concept or construct that acts as the framework to ensure that the business runs smoothly (e.g. policies and procedures). As the leader, the chairperson must be skilled and practiced in implementing the methodology so that it does not become watered down and less effective.
Methodologies to consider include the ISO 37000 standard, King IV and the Sirdar methodology that is taught in our Applied Directorship Programme.
Being a chairperson on any one board should not be a full-time job, but it is a full-time, 24×7 responsibility because the board is always on duty. That said, filling the role of chairman can be highly rewarding because the impact that you can have by building an effective company through engagement at the board level is immense.
