Identifying the Appropriate Candidate for Board Chairmanship: A Guide
The term 'Chairman' might evoke memories of the 'boy's club' boards, dominated by men. However, times are changing, and with women taking up a record 33% of Board Chairs in 2020, it's time to move away from using the term 'Chairman.' The more inclusive title, Board Chair, fits the bill better.
The Board Chair is no mere title bearer; they are the leading light of the board, steering the vessel through rough and calm waters. The Board Chair's influence on a board's dynamics can significantly determine its effectiveness, according to Leblanc (2010).
Meeting the demanding role of a Board Chair
With great power comes great responsibility, and the Board Chair isn't an exception. As the custodian of the governance process, the Board Chair must allocate their time wisely to focus on strategic direction and business matters, as outlined in the Higgs Report of 2003.
The Financial Reporting Council's Guidance on Board Effectiveness highlights the critical role of the Board Chair in setting conditions for overall board and individual director effectiveness. But how is the Board Chair appointed?
Seeking the right candidate
The Board Chair is a legal officer, subject to the same duties as a director under sections 177 to 179 of Act 992. In public companies, the Board Chair is often appointed after a comprehensive search by a professional recruiter or the Nomination Committee.
Experience, knowledge, and competence are crucial recruitment factors. The board chair should be well-versed in the company's operations, possessing a clear understanding of its goals and strategic vision. Putting an experienced chair in the wrong industry can be disastrous, especially in industries with complex products like banking.
Striving for effectiveness
While experience is key, other qualities can make a board successful. Research indicates that effective Board Chairs typically exhibit traits such as integrity, empathy, strong relationship-building skills, critical thinking, and the ability to navigate complex issues.
Lastly, "" a high-performing Board Chair knows 'how to get groups to work together, lead an effective meeting, and keep quiet, letting others speak,' as Charles Holidy, Chairman of Bank of America, succinctly puts it.
Jonathan, a corporate governance consultant, helps companies create success by navigating governance challenges and providing advisory services to Boards and companies. Contact Jonathan at [email protected] or visit www.yourscribe.co for more information.
Resources
- The Balance Small Business: Board of Directors Job Description
- Investopedia: Board of Directors
- Forbes: What Makes A Good Board Chair?
- PwC: Effective Board Leadership
- Harvard Business Review: Top 10 Qualities of Exceptional Board Members
- In the process of finding the right Board Chair, experience, knowledge, and competence are crucial recruitment factors, especially for industries with complex products like banking.
- The Financial Reporting Council's Guidance on Board Effectiveness emphasizes the critical role of the Board Chair in setting conditions for overall board and individual director effectiveness, highlighting the importance of strong leadership traits such as integrity, empathy, and critical thinking.
- As the custodian of the governance process, the Board Chair, according to the Higgs Report of 2003, should allocate their time wisely to focus on strategic direction and business matters, ensuring the finance, business, and leadership aspects of the board are addressed effectively.
