A board chair is often seen as a facilitator of meetings when, in reality, the Chairman of the board has way more responsibilities. In this role, the Chair of the Board of Directors stays focused on the organization’s best interests.
They also set the tone for effective corporate governance and board leadership. Board Chairs collaborate with the CEO or Executive Director to shape the board’s culture and work. From their board seat, their role is to influence the board’s direction and priorities. The role is active, allowing board members to build upon their strengths while facilitating growth in favor of the organization.
Read on to answer any questions you may have about the “Chairman of the Board” role.
Who is the chairman of the board?
The Chairman of the Board of Directors is the executive leader of the board of directors who ensures accountability and is jointly responsible for the management of the officers. The chairman’s job is to ensure that the company’s obligations to its stakeholders are met.
As the head of the BOD, the Chairperson’s authority is determined by the organization’s bylaws. They preside over the board of director meetings and ensure the organization conducts business orderly. Typically, they also manage the board’s meeting agenda, whether in-person or online. This person does not usually have a role in the day-to-day operation of the organization’s activities but rather ensures that the BOD is in good order.
What do you mean by the “chairman” of the board?
While the term may be outdated, “chairman” of the board does not mean that the role needs to be performed by a male. It simply refers to the person who is at the helm of the Board of Directors and is often referred to as “Chairperson.”
Typically, the Chairperson of a corporation oversees the board of directors’ activities by discussing problems related to financial stewardship, policy decisions, establishing operating procedures, and securing qualified members.
What does the chairman of the board do?
Members of the board usually elect the Chairman by majority vote. Influencing both the board members and the management, the position is the strongest in a company. It is common for the chairman to be the board member with the most significant stake in the organization and have the highest voting rights.
The bylaws of the organization dictate the responsibilities of the board chair as well as the authority. The Chairman of the Board can usually be found focusing on the following key activities:
- Assist Senior Management in liaising with the Board.
- Plan and set the agenda for board meetings and coordinate logistics.
- Occasionally chairs board meetings.
Chairman of the board responsibilities
The CEO (or president) initiates and implements corporate strategies and goals, while the chairman and board perform oversight to make sure the strategy is executed, monitoring key performance indicators. At the same time, the Chairperson ensures the Board of Directors operates with strong governance and in the best interests of the organization.
Specifically related to board meetings and board performance oversight, the Chairperson oversees agendas, meeting management, committee direction, evaluations, board conduct, learning and development, and succession planning. In many organizations, the board chair is also part of the executive committee and may often serve as the chair of the executive committee as well.
The chairman of the board plays a pivotal role in managing conflicts of interest by setting the ethical tone, overseeing policy implementation, facilitating transparent disclosures, guiding the board through complex situations, and ensuring compliance, all while maintaining the integrity of the organization and its decision-making processes.
See related: What are the roles and responsibilities of the board of directors?
Is the chairman of the board the same as the President?
A company’s president is usually one of its directors and may also be the CEO. That is the most top leadership role in an organization but should be different from the Chairman of the board which should be played by someone external to the organization for effective oversight.
A business is run by the CEO / President, and a board is run by the Chairman.
There are cases where the Chairman is also the President / CEO, but it is well known that this is not the best practice.
Which is the higher position, CEO or Chairman?
While the CEO has significant authority over the organization’s decisions and actions, the Chairman and board of directors officially have ultimate oversight. They have the authority to fire the CEO for example. There can be incredible tension between the two roles, especially in founder-led companies.
Modern governance best practice advises separating the Chairman of the Board and the CEO to protect the best interests of the company and the members of the community it serves, along with its investors.
Chairman vs. CEO
Board chairpersons are ultimately responsible for Board performance and the CEO is responsible for the organization’s. The CEO and the board chairperson need to have clearly delineated powers and ideally, collaborate amicably to identify and execute the goals and strategy of the organization.
See related: The ex officio board member role explained
CEO vs. Chairman vs. President
Chief executive officer CEOs and board chairs have different duties and responsibilities. CEOs are the top chief executives over management, while the Chairperson leads the board. The CEO of the company or organization may also be the president. In very large organizations there may be a CEO and President often with the CEO focused on internal execution and the President more external for example on investor relations or board relations.
The CEO oversees the daily operations and logistics of the company and makes major decisions as the point of contact for all senior-level executives. CEOs typically delegate many responsibilities to senior, mid-level, and lower-level managers, depending on the company’s size. The CEO is responsible for implementing the strategic plan, which entails strategizing about competitors and entering markets. CEOs report directly to the board of directors.
Chairpersons of boards have significant power. They actively participate in creating the agenda and facilitates board meetings for the entire board. Board chairs usually work closely with CEOs but do not actively manage daily operations. The board chairman may take over if the CEO’s authority is rejected, until new leadership is appointed, the company’s president temporarily performs the executive director’s duties.
Is a chairman higher than a director?
The chairman of a company’s board is its head of directors. Shareholders elect the board of directors, and they are responsible for protecting the interests of shareholders. An organization’s board of directors typically meets at least quarterly to set long-term agendas, review and oversee the financial reports, monitor and manage the senior management team, and make significant decisions.
The board of directors’ duty includes recruiting, appointing, and evaluating the CEO’s performance and replacing anyone who fails to meet expectations. Generally, the board of directors is the top decision-making body of a company, and the board chairman leads the board.
Want more insights into board best practices? Subscribe to receive monthly news from Aprio.
By providing your email, you consent to receive communications from Aprio. You can unsubscribe at any time. See our Privacy Policy.
Best practices for an effective chairman of the board
Whether you’re leading a nonprofit board, private or public board, consider these best practices to excel in your role as Chairman of the Board:
- Foster open communication: Encourage frank discussions among board members and with the CEO. Create an environment where diverse opinions are valued and constructive disagreement is welcome.
- Prioritize strategic thinking: Guide the board to focus on long-term strategic issues rather than getting bogged down in operational details.
- Ensure board diversity: Strive for a board composition that reflects diverse backgrounds, skills, and perspectives to enhance decision-making.
- Conduct regular evaluations: Implement annual board and individual director evaluations to continuously improve board performance.
- Stay informed: Keep abreast of industry trends, regulatory changes, and best practices in corporate governance.
- Mentor new directors: Help onboard new board members and support their integration into the team.
- Manage time effectively: Ensure board meetings are well-structured and time is used efficiently.
- Build relationships: Cultivate strong working relationships with the CEO, other board members, and key stakeholders.
- Lead by example: Demonstrate the highest standards of integrity, professionalism, and commitment to the organization’s mission.
- Promote continuous Learning: Encourage ongoing education and development for all board members to enhance their contributions.
Wondering how to make chairing your board meetings easier?
Imagine if instead of scrambling to assemble board meeting materials or having to hound board members to prepare, there was technology that made board meetings more convenient. Aprio board management software makes the work of being Chairman of a board easier.
Find out how Aprio can make chairing meetings and communicating with directors simpler to improve board engagement. Let us give you a tour.
