The word Chairman is derived from the words "chair" and the Latin word "manus" meaning hand. The picture of a chief sitting in the chair and wielding a staff comes to mind. Much has changed and the chairman of today has to take into account the softer issues as well as the hard business issues.
In our recent director survey, a number of directors pointed out some guidelines:
- Dictator or Facilitator? The answer is yes and yes. The trick is knowing when to facilitate a discussion and when to be the dictator.
- Time keeper. If a board meeting is scheduled for 2 hours, then ensure the meeting is wrapped up in time. The board members have other engagements and it is up to the Chairman to execute proper time management.
- Ensure that a proper agenda is set. It is the Chairman’s responsibility to ensure and appropriate agenda is set ensuring the board will discuss the key issues affecting the business. Ensure there is a focus on achieving the strategy.
- Stick to the agenda. It is quite alright to address relevant matters in the order preferred but discussions should not wander unless it is in the best interest of the company. The Chairman can refuse new issues to be placed on the agenda.
- Keep the line between operational and board issues. The CEO is appointed to run operational matters and he or she is held accountable. The board and especially the non-executive directors should take caution in crossing the line between strategic and operational matters.
- Information must be sent to the board in advance. If members need to rely on the business judgment rule for their protection, it will be essential to be able to prove that information was received prior to the meeting. It is the Chairman’s duty to ensure the information is sent timeously.
- Summarise discussions. To be clear and to ensure consensus has been reached on topics of discussion, it is advisable for the Chairman to summarise the decisions. This will greatly assist in the production of accurate minutes.
- Ensure constructive relationships of board members. Heated debate creates an environment where issues are hashed out properly. It can be an art to manage the different personalities and the Chairman is key to ensuring a healthy balance is kept.
- Feedback on performance. The Chairman should provide the other members with feedback on performance and point out areas of development. This could be a great way to shape extraordinary business leaders ultimately resulting in long term stakeholder value.
- Ensure induction of new directors and mentorship. The Chairman should ensure a formal induction programme is set for a new director to get them up to speed with the regulatory requirements and the operational workings of the company.