The chairman’s primary role is to ensure that the board is effective in its task of setting and implementing the organization’s direction and strategy.
The chairman is appointed by the board and the position may be full-time or part-time. The role is often combined with that of managing director or chief executive in smaller companies. However, the joint role is not recommended for public companies listed on the Stock Exchange.
The main features of the role of chairman are as follows:
- As well as being chairman of the board, he/she is expected to act as the company’s leading representative which will involve the presentation of the company’s aims and policies to the outside world.
- To take the chair at general meetings and board meetings. With regard to the latter this will involve: the determination of the order of the agenda; ensuring that the board receives accurate, timely and clear information; keeping track of the contribution of individual directors and ensuring that they are all involved in discussions and decision-making. At all meetings the chairman should direct discussions towards the emergence of a consensus view and sum up discussions so that everyone understands what has been agreed.
- To take a leading role in determining the composition and structure of the board. This will involve regular reviews of the overall size of the board, the balance between executive and non-executive directors and the balance of age, experience and personality of the directors.
- To ensure effective communication with shareholders and, where appropriate, the unit owners.
The first committees of a corporation are appointed at the time of its registration. Subsequent appointments are at the AGM, elected by unit owners and governed by the organization’s articles of association, but any Act should also be checked. Typically the articles will provide for the board of committees to fill any casual vacancies or to appoint additional committee up to the maximum number specified by the articles. The chairman is elected by the committee members and has the same legal duties as other committees.
The essential tasks of a chairman are:
- providing leadership to the board
- taking responsibility for the board’s composition and development
- ensuring proper information for the board
- planning and conducting board meetings effectively
- getting all committees involved in the board’s work
- ensuring the board focuses on its key tasks
- engaging the board in assessing and improving its performance
- overseeing the induction and development of committees
- supporting the Manager
Source: Institute of Directors (IoD)