The chairperson of a corporate fiduciary board of directors generally leads the board meetings. Many see this person simply as the ceremonial head of the board. But besides presiding over Robert's Rules of Order, what is the chairman or chairwoman's real responsibility?
Well, stated irrevocably, they should be the senior arbitrar of fiduciary responsibility and behavior--in other words, the chair is where the board buck stops.
Recently I was asked, "What makes a good chairman of the board?" The best answer is not a checklist of qualities or tasks, but rather an outcome. My response is that a good chairperson is a director who leads their board to continually be the best that it can be in executing its fiduciary duties to the shareholders, and in questioning and guiding management in the best interests of building enterprise value.
This goes beyond managing the meeting through the agenda items to also include taking proactive actions to add missing expertise to the board, removing any directors who are no longer adding substantial value to the board, and always presiding over all meetings in a manner that ensures and protects an open, respectful, and thoughtful discussion of all matters before the board. A great chair must continue to maintain the respect, trust and confidence of the other directors, the management and the shareholders/owners.
While the chairperson presides over the company's board of directors' meetings and other activities, he or she will usually not have any executive responsibilities unless of course they are both the chairperson and CEO. Over the last few years, due to public encouragement, it has become best practice to separate these roles.
The CEO is, of course, a company's top decision maker, and all other executives answer to him or her. The chairperson of a company is the head of its board of directors, with no executive reports. Any authority the chairperson possesses is strictly that which is stipulated by the company bylaws or bestowed by the board itself. The balance of power between the CEO and the chairperson is best viewed as supportive, yet also a check and balance system to insure that the strategy, operations and culture of the firm are consistently in the best interests of all the shareholders.
The basic varieties of chairs
There are several basic varieties of chairs:
* The chairman or chairwoman who is not an employee. The most traditional situation is a chair who has no executive functions. They may...