What Qualities Make a Board Chairman Effective?

What are the qualities that make a chairman a successful leader? The role is almost entirely reliant on managing human relationships – with the board members, shareholders, stakeholders, management. Yet the results on which the chairman is judged are less abstract, as they are the concrete financial results of the company. With very little to count on in term of resources, how can one person manage all this? The qualities that lead to success are surprising, as a study shows.

How can the Board Chairman lead? Should the chairman be domineering, aggressive, controlling? Or should the chairman use a soft style, gradually bringing the board members to a consensus?

“I have enormous power without having any material resources. Yet, by controlling what goes onto the agenda, how the discussion question is framed, who gets to speak first, I can make a huge difference to the outcome. I have to use this power wisely for the benefit of the board,” writes one board chairman at a major UK company.

The role of board chairman (he or she) has become a high-pressure, multifaceted job, with many stakeholders holding high expectations on leadership. Yet, as the chairman above wrote, the demands on the chairman are great, yet the resources available are limited. The company secretary is there to support the chairman, but the big decisions, as well as the key relationships, like those with management, shareholders and stakeholders, must be forged by the chairman personally. This requires deep skills in working with many different kinds of people.

Want to improve your board performance? Learn what the 7 most exceptional board practices are.

Here is what is generally accepted as the chairman’s responsibility, according to a report by the UK Institute of Directors:

The chairman takes the chair and directs general meetings and board meetings. In addition to being chairman of the board, he is expected to act as the company’s leading representative, which will involve the presentation of the company’s aims and policies to the outside world, and to take a leading role in determining the composition and structure of the board. This will involve regular reviews of the overall size of the board, the balance between executive and non-executive directors, and the balance of age, experience and personality of the directors, to ensure effective communication with shareholders and, where appropriate, stakeholders.

This, of course, summarises a vast amount of activity in a few words. To drill down further and find out what makes a board chair successful, the INSEAD Corporate Governance Initiative conducted 74 face-to-face interviews with experienced board chairs to produce a research project spanning nine countries – Belgium, Denmark, Italy, the Netherlands, Russia, Singapore, Switzerland, Turkey and the United Kingdom.

Here are the qualities the survey showed were valued among board chairs:

  • Humility and ego management. One of the most experienced participants in the research put it this way: “If you intend to use your chair position as a platform for self-aggrandisement, you are in for trouble.” The words “restraint”, “non-domineering” and “leaving room for others” were cited when referring to fostering productive board discussions which lead to effective decisions.
  • Availability and presence. The chairs’ presence should be felt as little, and as much, as necessary. They should give others room to speak and yet be there to direct the conversation. In the words of one respondent: “It may be called a non-executive and part-time job, but I have no illusion: I have to be ready to mobilise and commit all my time to this board if the need arises. And I stay in permanent contact with the company to make sure I don’t miss this need.”
  • A good chair not only does the job professionally, but cares about the company, the board and the people. In the words of one respondent: “It’s like any other profession – you can only reach the top when you are passionate about what you do. In this case, it’s the board and the company it governs.”
  • Patience and reflectivity. Passion creates energy, enthusiasm and a focus on achieving results. But in leading the work of a group of professionals, it must be tempered by patience and the ability to pause and reflect. The chair should not rush to get things done quickly, but should focus instead on getting things done properly. Many respondents emphasised how this aspect of the job makes it different from that of the CEO, and how the adjustment process was not easy for them.
  • “Soft” and “hard” skills. Although, to an outsider, it may look highly technical, or even purely ceremonial, the work of the chair is almost exclusively about human relations – with specific types of people: senior, successful, action-oriented, performance-driven, sophisticated individuals from different backgrounds and countries. Managing these relations requires exceptional behavioural skills. Among them, the respondents most often mentioned the ability to listen, ask questions, frame issues and provide feedback. Two other competencies they referred to were synthesising ability and systemic thinking, in the “hard skills” category.

Obviously, the real determination of a chair’s value to the company is made based on its success or failure. A chair must play a key role in leading the company to success, while managing its image with the public at the same time. To do all of this well, the support provided by a high-quality board portal is invaluable.

Diligent Governance Cloud provides the complete solution

It’s clear that chairmen need support in their very demanding roles.

Governance Cloud is Diligent’s ecosystem of cloud-based governance tools that provides a complete solution to enable leading bodies of organisations to mitigate risk and govern collectively at the highest level.

Seasoned in the governance space, Diligent has been in the leading position in the market for more than 15 years, offering the industry’s leading, most secure and most intuitive board management technology. Our deep customer insights and heavy investment in R&D have allowed us to expand our offering to support the full governance journey.

Whether you choose to start with only Diligent Boards™ or multiple, integrated tools, we are the only partner in the market you can grow with as your governance needs evolve.

Board Portal Buyer’s Guide

With the right Board Portal software, a board can improve corporate governance and efficiency while collaborating in a secure environment. With lots of board portal vendors to choose from, the whitepaper contains the most important questions to ask during your search, divided into five essential categories.

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