Four things effective Board Chairs do

The skillset required to be an effective Board Chair takes in a broad range of different tasks and qualities, some of which go against the grain of what one typically imagines the role to embody

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Credit: Christina Morillo

Chairing a publicly listed or major private company board is no small task. Entrusted to some of the most seasoned businesspeople in the world, the role requires strategic acumen, interpersonal sensitivity, and an ability to move forward through ambiguity and amid competing perspectives.

Here are four behaviours that high-impact Board Chairs make habitual, some of which may surprise you:

1. Great Board Chairs create an environment of clear accountability, humility and vulnerability
While humility and vulnerability may not be words that first come to mind when picturing a board room, it is crucial for both the company’s executive leadership team and the Board of Directors to approach problems and decisions with curiosity, self-awareness and the right level of acknowledgement, because it is unlikely that one individual will have all the answers.

If the Chair can foster an environment – and encourage dialogue – in which the Board respects the executive team’s role in running the business on a day-to-day basis and the executive team recognises that the Board’s role is to bring ‘pattern recognition,’ constructive challenge, broad experience and an independent perspective, then everyone’s interests will be well-served.

True excellence is achieved when a Board Chair builds sufficient trust that a company CEO feels comfortable proactively surfacing issues where they don’t have all the answers. In the best cases, CEOs seek out not just guidance from Board Chairs, but also mentorship.

2. They understand the true meaning of consensus and use that to drive decision-making
Ultimately consensus is a great idea but not one that is often achieved. Any decision that makes its way to the Board is likely to be inherently complex and laden with strong pros and cons attached to all the relevant options or paths forward.

Highly effective Board Chairs dissect decisions into three parts: the facts of the case, the principles/values at play, and the decision itself. If there is disagreement about the facts or the principles/values at play, then there is no use trying to reach a decision (even by vote). A good Board Chair can identify gaps among Board members and/or executive leaders and lay them out to work through in a constructive way. And, it’s important that the conversation engages the Board in such a way that they agree on the facts of the case and the principles/values at play. The final decision tends then to follow ‘naturally.’

3. They encourage real listening and open debate
There are Boards that serve to rubber stamp what CEOs propose, and others that provide real constructive challenge. A critical role of a Chair is to ensure the latter approach.

The main difference shows up in Board members’ willingness to engage in a hearty debate that is indicative of deep authentic caring about the topic at hand. It’s easy to turn up unprepared and vote to approve something because the CEO/executive has put time and effort into considering the issues. Effective Boards deeply appreciate their obligation to ask questions, understand context and implications fully, and always act in a way that is best for the long-term health of the business and shareholders.

4. They redefine the idea of a skills matrix to best serve the long-term interests of the company
There are traditional ways of thinking about the composition of a Board. Some committees require particular experience profiles (RemCo requires at least someone with HR experience; Audit Committee requires a level of finance expertise). Increasingly, Board Chairs are considering the importance of diversity (in its broadest sense – background, sectors, skills, approach, etc) around the table.

For example, thinking outside industry and functional lines might lead a Board Chair to recognise that a company with operations, customers, and supply chain across multiple markets requires at least one non-executive director who brings a deep appreciation of geopolitical risk factors, which can have significant implications for the company’s resilience in specific geographies.

In conclusion, being a Board Chair is a challenging task by any measure, but adhering to the above four principles can help make the role far more impactful and result in an effective Board that truly adds value across all aspects of people, performance, strategy and risk.