The role of the chairperson

Our previous blogs discussed various aspects of corporate governance and the composition of the governing body (the board). One of the most important roles within the board, which we will discuss today, is the chairperson. I enjoyed working with incredible chairpersons throughout my career, and I am grateful for the experience, the knowledge gained, and the privilege of having been exposed to great business leaders.

 

In terms of the King IV Report on Corporate Governance™ (King IV™) practice note, a chairperson is a non-executive director elected by a company’s board of directors, responsible for presiding over the board or committee meetings. The chair is accountable to the board. A board chair’s primary role is to provide leadership to an organisation’s board, set the tone for its performance, and undertake its management. It is recommended that the chairperson play an active role in engaging board members, build upon their strengths, and address any weaknesses.

 

To clarify the chairperson’s role, the duties and responsibilities must be included in the board charter. That way, it creates awareness among board members and other stakeholders. Today we will look at some of these duties.

 

Concerning the organisation:

The chairperson has an important role to play in any organisation. He or she will represent the organisation at the AGM and other shareholder meetings, engage with key stakeholders, and attend functions such as industry conferences. Regarding the AGM and other shareholder meetings, the committee’s chair is also expected to answer its questions. In my experience, when it comes to industry conferences, it is usually dealt with by management; however, should engagement on board level be required, the chairperson would be the representative.

 

Concerning the governing body:

The chairperson provides the overall leadership and oversees the board to lead ethically and effectively, and cultivate and exhibit the characteristics of integrity, competence, responsibility, accountability, fairness, and transparency. The chairperson also ensures that the board of directors fulfil its duties of steering and setting strategic direction, approving the policy, and planning and overseeing the organisation to ensure that it achieves an ethical culture, good performance, effective control, and legitimacy. When it comes to appointing new directors, the chair participates in the selection process of board member appointments. This participation also extends to the appointment of the company secretary, since the parties work closely together. The company secretary assists the chairperson with the formal succession plan and board evaluations. Other chairperson duties include mentoring less experienced members, ensuring that new members are aware of their responsibilities through an induction programme, and keeping board members informed of significant issues between meetings.

 

Concerning management:

The chairperson acts as a sounding board and provides counsel to the CEO, conducting the CEO’s performance appraisal and being informed of other executives’ appraisal findings. The chair assesses whether the organisation is getting the full value from executives and offering guidance during crisis times. The chairperson also oversees the performance and acts as the contact point for the company secretary in respect of the discharge of statutory and board duties.

 

Concerning meetings:

The role includes presiding over board meetings and ensuring that time in meetings is used productively. This process usually starts with setting the agenda and allocating time to agenda items. The chair then ensures that relevant and accurate information is placed before the board, enabling board members to reach informed decisions. The chair sets rigorous standards for meeting preparations, ensuring that sufficient effort has been devoted in preparation and that those present constitute a quorum before decisions are taken. Additional duties include ensuring that an effective company secretary is in place to support the board to take minutes and record all decisions.

 

In addition to the chairperson, King IV™ proposes that a lead independent (LI) be appointed. The LI plays an indispensable role on the board and is crucial to ensure an independent counterbalance to the chair. In essence, an LI appointment is necessary to give the other non-executive board members a stronger voice, achieve a balance of power, reinforce accountability mechanisms, or mediate conflict on the board where the chair is involved.

 

At Okina Company Secretarial Services, we emphasise the importance of good leadership by the chairperson. As experts in corporate governance with practical experience, we can advise on all aspects of good governance, including board composition and administration, agenda setting, meeting management, board evaluations, succession planning, and induction of new directors.

 

We hope you feel inspired to allow us to help your chairperson make your board meetings flawless.

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