Corporate Governance How to be an Effective Chairman of the Board

The ideal chairman of the board is both good leader and has the qualities and the skills to perform the job. There isn’t any one style that works best – different situations demand different styles of chairmanship. But successful and effective chairmen are open and relaxed, have good personal relationships, are equal rather than superior and demonstrate high level of integrity in word and action.
The chairman’s time commitment is significantly greater than that of other directors. He or she must not only prepare for and attend board and committee meetings, but also have the time to interact with the chief executive, to meet with other staff and directors, and to carry out important external relationships.
The chairman should be chosen for the personal qualities he or she brings to the role and for individual experience and track record in leadership and governance. The critical aspect is the leadership they can provide to the board and the organisation. The key function is to create an effective board.
The personal attributes that distinguish superior chairmen vary widely in degree among individuals, but most share the following:
* Has the time to devote to the role and duties of chairman;
* Is leader and demonstrates leadership skills such as persuasion, motivation, good interpersonal relationships;
* Effectively leads the board processes, demonstrates objectivity and independence;
* Has the will and ability to challenge the board and individual directors when appropriate;
* Can establish and maintain appropriate personal relationships with the chief executive;
* Has good understanding of, and broad experience in, the organisation’s sector;
* Is clear and innovative strategic thinker;
* Has clear strategic vision of what he or she wants the organisation to be in the future, including its culture;
* Has the intellectual capacity to work with sophisticated analytical and decision-making techniques;
* Practises, without compromise, the difference between governance and management – leaving the chief executive to do his or her job;
* Is an effective communicator, both inside and outside the organisation;
* Encourages participation and is good listener;
* Clarifies issues and impartially summarises viewpoints;
* Demonstrates personal integrity (not politics);
* Demonstrates common sense and realism;
* Exercises good judgement and discretion;
* Commands respect.
The important thing about the qualities and abilities of any chairman is that he or she can effectively apply them to the job. The practice of chairmanship and the ability to lead and chair effective board meetings doesn’t always come naturally. Neither does the ability to act as the spokesperson for the organisation, to speak publicly, or to communicate effectively with the media and stakeholders. To perform all these tasks effectively the chairman must not only be well informed and briefed, but also have the necessary communication skills and confidence to deliver.
Maintaining stakeholder and public confidence in the organisation is an essential part of the chairman’s role. The competencies to earn and maintain that confidence are essential attributes. The chairman must also have the standing, skills, and self-confidence to lead and control the forceful directors on board.
There are some specific aspects to consider in selecting chairman for not-for-profit organisation. There is lot more to being an effective chairman of not-for-profit than simply having your heart in the right place. They generally serve diverse constituencies and stakeholders, and financial results alone are not an appropriate measure of performance. If the chairman has had long association with the organisation, this experience and involvement will mean he or she understands the culture that works best, will more quickly recognise and understand problems, and have greater credibility with the constituents and stakeholders.

Competencies of the chairman
In addition to the core competency of high quality chairmanship, the chairman of the board should bring track record in:
• understanding modern organisational leadership, management and governance in order to provide the necessary leadership;
• understanding of how the organisation works and how it is managed;
• leading and directing an organisation in continuing performance improvement;
• leading and directing change;
• operating in and appreciation of the external/political environment in which the organisation and board must function;
• working with and positively influencing the media.
An effective chairman will be experienced in and understand the governance role. He or she will demonstrate integrity and have the time to keep in touch with the organisation day to day in order to maintain an awareness of key issues.
The chairman must be experienced in dealing with people and have the ability to resolve issues, differences and personal conflicts between directors, and between directors and the chief executive and management.
The style of an effective chairman is usually that of dynamic organisational leader rather than that of passive director. The chairman must provide personal leadership, direction and support to the chief executive in leading and managing. best practice chairman will continually maintain awareness of the external environment, the trends, the happenings, and the issues relevant to the organisation he or she leads. Being an active networker and attendee of relevant seminars and presentations is great way to keep informed and up to date. M

Doug Matheson Life NZIM, is the immediate past national chairman of NZIM and chairman of several boards of directors.

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