Earlier this month I ran into a friend who'd just been appointed the independent chairman in a medium sized business. As he went on about what he hoped to achieve, how he had a clear picture of what he wanted to do with the company, and so on, I sensed that he was falling into the classic role confusion between chair and chief executive - and was seeing his appointment as some type of super-CEO position, or in his words the ‘ultimate decision-maker’.
For those who've never been in the position, this is a common misconception. When you look at the role of chair for the first time, it can be tempting to think that you’ve finally made it. But this soon changes: one of the first things you learn is that it's not your job to run the company. As an independent member of the Board - even as the Chair - you don’t have any executive authority of your own. (I also know from experience how frustrating, and potentially undermining, it is for the CEO to work with a chairman who can't stay away from the place, or your office!)
I don’t want to disillusion any budding Board chairs, but the reality is that you’re not the boss: under good governance practice, you are ‘first among equals’, with any formal decisions still coming from the full Board; you’re the chair of the Board as long as you have the confidence of your fellow Board members. One of the most useful ways I heard it described, when I was first appointed chair of a small Board, was to remember that you chair the Board... NOT the Company.
While the CEO’s job is to run the company, yours is to run the Board so that it adds value and gives the CEO the best possible chance to succeed. A useful reality check on whether the Board is adding value is to ask at the end of any Board meeting, ‘Is the organization better off now than when we arrived this morning?’ If the answer is ‘No’ or even ‘I don’t know’, your response should be, ‘So, remind me why we met today.’
I was thinking about how to identify some of the practical attributes that make a successful Board chair, when I came across this short article from Harvard Business, called ‘Leading when you don’t have formal authority’. The article describes what an effective project manager or independent contractor needs, when he or she doesn’t have authority to give orders or conduct performance reviews of the people they work with, but whose performance will determine their success (they are attributes you'll see in almost every effective Board chair):
- Letting your enthusiasm be contagious;
- Demonstrating excellence without wearing your ego on your sleeve;
- Acting more as a coach than a captain.
As you can see, they're not the type of thing you'll typically read in a CEO's job description - although they are also not totally removed from some modern management thinking. The more I thought about it, the more I realised the article could have been written for my friend - yes, he now has a copy... and having chaired his first Board meeting he also understands how true (and timely) it is.
[First posted July 2009]