By John Harte, Managing Partner at Integrity Governance
The role of the chair, to lead the board so it performs successfully, has been changing as societal expectations of effective board leadership evolve from ‘control and command’ through to ‘lead, enable and facilitate’.
The challenges of the pandemic have accelerated the pace of change on many boards and increased demands and expectations on the role of the chair.
Using emotional intelligence to deliver effective leadership
The days of a hierarchical ‘command and control’ style are now history. Effective board leadership demands emotional intelligence, an ability to put ego to one side and become a truly facilitative, emotionally intelligent and enabling leader of the board.
In an increasingly challenging and virtual world, there’s a need for adaptable, agile leadership. This requires chairmen to move to a more facilitative leadership style – one that embodies emotional intelligence. Today’s successful chairmen generate trust, build engagement, provide leadership and discipline to their boards, yet embody empathy to create and nurture a board culture of psychological safety. This allows bad news to travel to the board faster than good, empowers directors to have the courage to constructively challenge and creates an environment in which it is fine not to have all the answers, particularly during these difficult times.
The foundation of an effective chairman is role clarity
Role clarity is the foundation of an effective board and chair. Good chairmen know and respect the boundaries between the board and the CEO, and particularly between the chairman and the CEO, to avoid ambiguity and confusion. The boundaries between the CEO and the chairman should reflect the nature of the company, the strategy being pursued, the performance and impact in these times on the company’s prospects due to Covid. Purposeful chairmen are clear about the value they add in leading the board. They have board composition, workplans and calendars which reflect this value delivery, and a culture that regularly assesses board, CEO and individual director performance in stewardship of the agreed value creation.
Make the most important relationship in the governance landscape strong and effective
The most important relationship in the governance system is between the chairman and the CEO. The quality of this relationship affects the performance of the company, as well as impacting on the rapport between the board and the top team. In our experience, if this relationship is not working, then one or the other will leave the organisation. Success factors include honesty, candour and a relationship where the chairman and CEO are friendly, but never seen as friends. The relationship must be built on trust, respect and absolute role clarity.
The health crisis has highlighted the need for the leader of the board to refocus directors on future strategy. Good chairmen must therefore think several meetings ahead and direct the attention of their board beyond the day-to-day and onto the purpose and future performance of the company and the board. Too much time and energy focussed on oversight and past performance is often at the expense of future planning, strategy and better anticipation of risk.
Create and maintain a first-rate board
For the board to be effective, the chair needs to look at its composition and consider if it is fit for the future. Good, well diversified boards bring a range of perspectives to generate better decisions and outcomes. This requires a board that not only demonstrates the five drivers of diversity – demographics, skills, experience, thinking styles and circles of influence – but a truly inclusive and psychologically safe board culture where every director feels welcome, wanted, respected and valued. It is the job of the chairman to move the board beyond tokenism to true inclusion to deliver the added value the increased diversity of directors brings. “It’s time for good chairmen to step up and become great chairmen. To do so they must evolve to ensure they continue to add maximum value in leading and facilitating effective decision-making by the board throughout these difficult times, and beyond.”
“It’s time for good chairmen to step up and become great chairmen. To do so they must evolve to ensure they continue to add maximum value in leading and facilitating effective decision-making by the board throughout these difficult times, and beyond.”
Effective induction process
The chairman must take the lead in making inductions work better. There’s no point dumping a pile of reading material on a new director and expect them to hit the ground running. To ensure the new arrivals add value as early as possible, which is particularly important in these challenging times, they must put an 18–24-month induction and learning journey in place. The chair must also continuously strive to improve this process, based on objective feedback.
Leading the review of the CEO, chairman and the board
The purpose of an assessment or review is to improve board performance. Chairmen must increasingly take responsibility to ensure that they, the board and CEO are ‘fit for the future’. They always need to be asking, does the board have the composition, leadership, capability, capacity and culture to deliver success for the organisation? To this end, they must take the lead in the areas of reviews, succession planning processes and recruitment to the board. The chairman, board and the CEO derive substantial benefit from a structured and systematic performance review with clear accountability and follow up. The need for this approach is even greater as boards continue to navigate through a Covid world after a tumultuous 2020.
The chair needs self-awareness
Finally, chairmen need to have self-awareness. This means they should honestly ask themselves if they are the right leader for the board today and in the future. They need to answer key questions, such as, ‘am I leading the board in a way that’s adding value?’ And ‘is my approach enabling or constraining the work of the board?’. It’s good chairmen who will consider if they need additional training, mentoring, experience or development, to ensure what they bring to board leadership remains relevant and truly value-adding.
It’s time for good chairmen to step up and become great chairmen. To do so they must evolve to ensure they continue to add maximum value in leading and facilitating effective decision-making by the board throughout these difficult times, and beyond. This requires chairmen to be emotionally intelligent, to establish role clarity on the board, have a strong relationship with the CEO, be future focussed, ensure a diverse board, deliver an effective induction process, lead reviews of the board and have self-awareness.
About The Author:
John leads a global team at Integrity Governance, a company that is focussed on making boards more effective. A boardroom expert working with multinationals, SMEs, trade associations and not-for-profits, he provides practical, impartial advice to directors, business owners, executives and CEOs to help improve board performance. John and his team have advised the boards of organisations in the UK and around the world since he founded Integrity Governance more than 16 years ago.