Creating a thought partnership
The chair/CEO relationship is a critical partnership that is crucial to an effective, well-functioning board.
OPINION: People unfamiliar with the role of the board chair (to some extent, anyone who hasn’t been a chair) might ask what’s so different from being ‘just a board member’. After all, they attend the same number of board meetings as other directors, don’t they?
Over the past few years, I’ve developed a framework that I hope demystifies the role, describes its scope, and demonstrates how critical it is to the success of both board and organisation. This has resulted in a vaguely Scottish-soundin acronym for the five roles of the board chair – ‘MCBED™’.
The first role of the chair, the one that everyone knows, concerns meetings. The chair’s most obvious job is to plan and lead powerful board meetings – meetings at which the board makes the decisions that only the board can make, where we tackle the tough issues, where differing views are sought and tested, and when we know by the end of the meeting that we’ve made the boat go faster – that the organisation is better off than at the start.
Achieving this in our limited time together takes careful agenda planning and ensuring that we receive high quality briefing material in plenty of time. In the meeting, the Chair must remain alert to who’s speaking; who still needs to – and who needs not to; ideas that might be emerging; what we still need to address; what we might be missing; and, finally, when we’re ready to decide.
The second job, that can occupy a lot of time, is managing the board’s relationship with its only direct report, the chief executive.
At its best, this is one of the most satisfying parts of the chair’s role – developing and nurturing a strong working relationship based on trust, openness and respect (in both directions). The paradox is that it must not evolve into personal friendship: as chair, you act on behalf of the full board, not on your own account, and you always need to keep that professional distance.
In contrast, if the relationship breaks down, or if the board begins to lose confidence in their CEO, managing this relationship will become challenging, time consuming and potentially frustrating.
If the relationship breaks down completely, one of you probably needs to go: I can’t remember a broken relationship ever being fully rebuilt and if the chair and CEO can’t work together the organisation will suffer.
One of your biggest responsibilities as leader is to build and develop your board.
Some chairs have the luxury of being able to select, or at least nominate, who joins the board. You must resist the temptation to appoint people who look and think like you, which might make for a more superficially collegial board. Instead, you need to think hard about the attributes that will add the greatest value, offer the best oversight and deepest insights, and find people who think differently, so that the whole board is greater than the sum of a few cosily-connected parts.
Where directors are appointed or elected by others (usually shareholders or members), I don’t believe in waiting passively to see who’s appointed but, rather, that the board and chair have a right – even a duty – to let the shareholders/members know what skills, experience and personal networks might add the greatest value to the board. The shareholders may choose to accept that advice, or not.
By whichever route your fellow directors arrive, as chair you need to make the most of your team by:
Gone are the days of the invisible board or the Chair who appears only for the AGM and set-piece media announcements. Today, our external stakeholders and shareholders expect to know us, to hear from us and to be able to contact us if needed.
As chair, I also find huge value in getting to know the organisation on the ground and in hearing from the people in it. This is not about getting in the way of management – it’s vital that we don’t – but about understanding what makes the organisation tick, and at the same time repeating the board’s key messages, showing that we’re all heading in the same direction, and helping people to understand the valuable part each of them can play.
If you ‘dig the well before you need the water’, to build the trust and confidence of your shareholders and other stakeholders, you’ll find it easier to have the tougher conversations when things aren’t going to plan or you see clouds on the horizon.
Finally, one important aspect of the job that I’ve seen several chairs forget, especially those who are new to the role: besides balancing your time with the tasks I’ve mentioned above, you’re not simply a facilitator or a coach – you’re also still one of the directors.
You mustn’t dominate or cut discussions off too early, but you’re probably better informed than your colleagues. You still have a valid perspective and the right to ask searching questions.
You also need to avoid a trap I’ve seen several chairs fall into; you’re not in the boardroom as ‘defence counsel’ for your CEO.
If you want to make a real difference in your governance role, there’s no greater satisfaction than leading your board through challenging times and seeing the value that you and your colleagues have added.
As a colleague said to me recently: “Your job isn’t to live for ever... it’s to build something that will.”
Good luck!
Richard Westlake is a Chartered Fellow of the IoD, a Member of the AICD, and Managing Director of Westlake Governance Limited. He has chaired a wide variety of organisations, including Careerforce Industry Training Organisation, Intergen Limited (now CapGemini), the New Zealand Telecommunications Forum, Standards New Zealand and Canterbury Opera, and he was the establishment chair for two state-owned enterprises, MetService and Quotable Value. He currently chairs New Zealand Home Loans Limited and Hospice New Zealand.
The views expressed in this article do not reflect the position of the IoD unless explicitly stated.
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