| Author's Name: Mark Schultz
Date: Tue 27 Sep 2016
The role of the Chairman of the Board, whether it be a for-profit or non-profit organisation, has evolved over the years to today being one that takes ultimate responsibility for the overall performance of the organisation. In this article, we will discuss the role of the Chairman from both an internal and external perspective and highlight the importance of this position in the organisation’s quest for good governance and sustainability.
The internal perspective
The above governance organisation chart provides an overview of the governance structure that is created to deliver an organisation’s mission. As we have discussed this framework in detail in previous articles, suffice to note here that the Chairman is the representative of the Board who provides leadership to the board itself and is the conduit by which communication and direction is given and received up and down the organisation. These functions are effected through:
The Chairman’s position should be rotated on a basis that provides stability, continuity and effective leadership, without creating an environment that produces complacency, group think and even hubris.
The external environment
In today’s rapidly changing and connected world, engagement and management of external stakeholders has become an important component of good governance. Social media has given a voice to so many more stakeholders, and despite the presence of the uninformed and ignorant social media commentators, the board must not be in denial about its presence and potential adverse impact on the organisation if not handled appropriately. In this respect, the Chairman of the board’s role includes:
This external role places an added responsibility on the Chairman in terms of behaviour. As an example, recently the AFL experienced very negative responses and feedback due to the behaviour of two radio commentators who just so happened to be AFL Club Presidents. Each claimed to be just joking and providing entertainment in their “day jobs”, yet I wonder how this was perceived by other stakeholders of their Clubs. I don’t believe you can have two or more sets of behaviours, each relative to what you are doing at the time. It causes confusion, impacts on respect and maybe even sends the wrong message i.e. its ok to behave differently and even in a contradictory manner by simply saying “this is a different role and therefore I can say or do this!” The advice here is - do not confuse your stakeholders by having different behaviour patterns, it is not good governance or leadership - behaviour is a personal choice and the Chairman’s behaviour should reflect and mirror the organisations values and principles at all times.
In summary, the role of Chairman of the board should not be offered nor accepted without a very clear understanding and acceptance of the duties, responsibilities and expectations of this position. “First among equals” is an appropriate characterisation of the role of the Chairman in any organisation and getting “it right” is the first step towards good governance.