The Exceptional Chairman – 8 Behaviours
I was so pleased to receive the research report by Alvarez & Marsal titled “What makes an exceptional Chairman? Required qualities for challenging times” authored by Sir Roger Carr. In my experience of acting as the Chartered Secretary of more than 20 companies has left me concerned and exasperated about the skills of many chairpersons.
After interviewing 22 chairmen from FTSE 100 and 250 companies and other high-profile bodies they found that the following eight behaviours are essential to being exceptional and I can’t agree more.
1. Understanding the business
“Exceptional chairmen are fully committed to their role and their company, and according to our interviewees, do their homework to ensure that they are adding value to the role. They make it their mission to develop a profound understanding of their firm’s market, operations, values and shareholder expectations. Drawing on deep commercial experience, they quickly identify the needs and issues of the business.”
The fact is a chair has to be a polymath with several years experience in business and preferably a knowledge of the industry of the company.
2. Preparing for the future
The one certainty is that that there will be constant change and the board has to provide leadership in this regard.
“A clear template for the future gives a framework that improves board discussions and decision making.”
3. Building and getting the best from the board
“Exceptional chairmen know how to attract and retain the best non-execs for their board.”
Leadership is a team sport and the result of groupthink is often better than the result of any one mind. The chairman has to choose and lead the team for the benefit of the company.
4. Working with the CEO
“The relationship between chairman and CEO is the lynchpin in a successful board.”
The opposite is so true…if the relationship between the two leaders are not healthy it is felt throughout the echelons of the company.
5. Providing air cover
“The less able chairman becomes a ‘dead weight’ in times of crisis, disagreeing with the direction of the company, but not prepared to lead the way, struggling to direct the board and forcing informal leaders to fill the leadership void. The less able chairman also fails to provide the air cover that would allow the CEO to focus on crucial operations during a crisis. To avoid risk and exposure, the less able chairman is unwilling to take the big decisions – at a time when inaction has the potential to derail the business.”
I have seen how boards have become unable to make decisions in times of crises as they simply did not have the backbone required to face the challenges presented to them.
6. Taking tough decisions
“What sets exceptional chairmen apart is their ability to cut through complex issues and reach clear decisions, along with the unerring quality of their decision-making.”
The inability to make decisions at times of need can actually be the cause of a company’s demise – hence the right decisions at the right times are essential for success.
7. Inspiring and energising leadership
“With experience, capabilities and comfort with their role, the exceptional chairman brings a vigour and energy to the board.”
As Jim Collins have said it is important for directors to be able to disagree vehemently, but to leave the meeting and support decisions taken.
8. Communicating with stakeholders
“We have seen how by nurturing a culture of two-way communication, the exceptional chairman gains the confidence of their directors and provides clarity in the boardroom.”
Then of course the chair is a public spokesperson for the company in good times and times of challenges.
The indispensable underlying characteristic in my view is also to be humble and open to continually learn.
By: Ronelle Kleyn
Director, Chartered Secretary, Attorney, Urban Farmer and Mom