Frank Lewis, an independent and professional chairman and NED of private and publicly traded companies with over 25 years experience, shares his key thoughts on what it takes to be a good Chairman in business today, as well as the specific qualities needed for success.
The role of the chairman has become much higher in profile and the expectations of the chairman have also increased as, quite rightly, stakeholders now expect an engaged, energetic and involved chairman who does more than simply manage the corporate governance process.
The success of a chairmanship undoubtedly hinges first and foremost on the relationship the chairman has with the Chief Executive, a relationship which should be centred on honesty, trust and transparency. The success of this relationship is based on mutual understanding by both parties of the distinction between their two roles.
Today effective chairmen must have an extremely good knowledge of the business that they are chairing, they must know enough to ask the right questions, and they must provide a constructive level of challenge to the Chief Executive. One of the main faults of chairmen deemed to be ineffective is their failure to comprehend that they are not there to run the business, and that their role is instead to support and guide. In simple terms to be a good chairman is to ensure that the business is well run and not to run the business.
There is however a fine line to walk between being too involved and being too remote. This means chairmen should devote the appropriate level of time to their roles, which means visiting operations, talking with staff and customers, as well as investors. The best chairmen are able to develop an empathy with the business and engage with its people and issues.
There is not however a ‘one size fits all’ prescription for an effective chairman. The right level of engagement will vary depending on the company’s stage in the business cycle, competitive environment and the experience of the CEO.
At the end of the day, what defines what it means to be a good chairman, is the ability to run an effective Board, and to manage relationships with both shareholders and stakeholders.
In an IPO specifically, the appointment of the right chairman is a key hire for a business. The chairman would greatly enhance the prospects of a successful IPO, by building an effective Board and calling on his years of experience to ensure the story a company sells to the market is both compelling and real.
Further it is the task for the chairman to set the tone at the top and to say what you want the organisation to be, establishing good governance and making sure the business has the right corporate reputation in its community.
Top 10 Qualities for an Outstanding Chairman
1. Charismatic personality
2. Good communicator and listener
3. Clear sense of direction
4. Strategic view – The Big Picture
5. Allow CEO’s to get on with their job
6. Good at governance
7. Broad experience
8. Business acumen
9. Able to gain shareholders confidence
10. Able to get to the key issues quickly
In conclusion a chairman would have done the job when the ‘Vision for the Business’ as set out and presented in the strategic plan by them and their Board, to the shareholders and stakeholders, has been achieved.
To find out more about Frank, visit http://franklewis.co.uk
Are you an interim chairman or NED? What do you think are the qualities needed for success and to be a good chairman? Share your opinion below.
photo credit:oporkka
