theceomagazine.com | 21SUPPORT THE CEO
“One of the key roles of the chair is to support and be a
sounding board for the CEO,” says Wendy Morris, Chair of
the Board for Tourism Tropical North Queensland. “I have a
very close working relationship with the CEO. The CEO and
the executive team are the ones who actually execute the
strategy, but it’s the board that sets the strategic direction
in a way that’s appropriate for the organisation.”
Speaking to the Harvard Business Review in 2013, former
SEC chairman and Aetna CEO William Donaldson insisted
that one of the most important functions of the board “is
to insulate the CEO from short-term considerations”.
LEAD, BUT DON’T RULE
“Generally you want someone who is going to lead the board,
but not rule the board,” explains Rowena McNally, a Fellow of
the Australian Institute of Company Directors, who has been
chairing boards for almost 25 years. “That older model of a
very dominant chair has largely disappeared, thankfully. You
are essentially the conductor of the orchestra – there to make
sure things run smoothly.”
Earlier this year, the INSEAD Corporate Governance
Centre launched a research project that surveyed 200 board
chairs from 31 countries, who all largely agreed. When asked
to describe chair behaviours that lead to productive board
sessions, answers included ‘restrained’, ‘non-domineering’
and ‘leaving room for others’.
ENSURE DIVERSITY OF VOICES
Diversity and representation of women and minorities is front
of mind when discussing the make-up of boards in today’s
world. While small gains have been made, Heidrick &
Struggles estimates that gender parity will not be
achieved until 2032.
But, the board chair rarely has sole control over
the appointment of directors. What they can control
is who gets to speak. “A chair needs to ensure that there
is broad thinking among the group and that diverse
perspectives are brought to the table. While it’s important
that you have very strong industry knowledge, experience
and input, sometimes the board need to think outside the
square and I think a chair’s role is to ensure that everybody
contributes,” emphasises Morris.
McNally agrees that the role must “encourage
contributions and help the board avoid groupthink. The chair
sets the culture of the board and the tone for how everyone
treats each other. Bullying cannot be allowed at board level or
it will permeate to the rest of the organisation”.STEP BACK
With so many board chairs coming from CEO backgrounds,
and some even functioning in both roles, there can be
confusion about where one role ends and the other begins.
Morris finds the temptation to help run the organisation a
common challenge. “I think if you’ve come up from the
C-suite, it’s very easy to want to jump in and get involved in
the execution of strategy. But, it’s really important that there’s
a clear line that separates the executive team from the board
and from the chair. Stepping back is something that I need to
frequently remind myself of. The chair and the board is about
oversight, not actually doing the work.”
In order to deal with the obvious conflicts that arise when
one person holds both roles of chair and CEO, a new role
has emerged in recent years among large, global companies.
About half of Fortune 500 boards have appointed a Lead
Director to supplement the leadership of the person in the
combined role of board chair and CEO.
But, ultimately, you can end up losing the most important
role of the chair. “When the roles are combined there are
no real checks and balances. No oversight. And the most
important role of the chair is to ensure the integrity of the
board,” notes McNally.“What if, and I know this sounds kooky,
we communicated with the CEO.”Leader of the pack | INSPIRE