Written by Lawrence Zammit, 16 September 2013
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The role of a Board Chairman is not limited to presiding over meetings and is gradually increasing in importance. Admittedly the legal responsibilities of the Chair are the same as those of the fellow directors in that he is first amongst equals. However he is expected to assume additional roles on behalf of the other directors. This is why a Board Chair needs to enjoy the full trust of the other members of the Board.
This line of thinking is not limited only to public companies, but also to family businesses as well as other companies. How expanded this role should be is still a subject very much under discussion.
Apart from presiding over meetings and ensuring that the Board is serving as an effective forum for decision making, the Board Chair is also expected to provide leadership to the Board for all aspects of the Board’s work.
As such he needs to guide the Board in the recruiting of the CEO and in evaluating his performance. He also needs to ensure that the Board is setting the direction of the company and not just rubber stamping the direction suggested by management. On behalf of the Board he must provide guidance to the CEO whenever he thinks this is required and not only when it is requested. He is the custodian of the principles of corporate governance and serve as the public face of the Board with the stakeholders.
In brief, the Board Chair sets the tone and the climate for relations among Board members and between Board members and the shareholders and stakeholders and between Board members and executive management. This in turn sets the tone and climate for Board meetings. The role of presiding over board meetings is a consequence of the much broader role.
This expanded role is evidently one which serves as a check and balance to the authority of the CEO. Therefore there is a perennial question that needs to be asked. Should the CEO of an organization also be the Board Chairman?
Although in theory there is agreement that the roles should be separate, in practice it does not always work this way for various reasons. My view is that the roles should be kept separate as otherwise the Board Chair would be unable to fulfill his role effectively.