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 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.
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.
While the term may be outdated, “chairman” of the board does not mean that the role needs to be performed by a male.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.
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 chairman’s responsibilities and authority. The Chairman of the Board can usually be found focusing on the following key activities:
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.
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.
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.
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.
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. This person creates the agenda and facilitates 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.
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.
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.
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