Why does the Chair of the Board matter?

From ownership strategy to strategy

Business owners define an ownership strategy, which defines why they want to own the business, the direction they want the business to take, and their financial or other expectations of the business.

The Annual General Meeting also elects the Board of Directors, which is responsible for ensuring the legality and effectiveness of operations as well as strategy work. Choosing a good Managing Director is central to these.

Power and responsibility of the Chair of the Board

There are no general, prescriptive guidelines for the work of the Board, but the Companies Act defines the duties and responsibilities of the Board. It is often a good idea to write your own Corporate Governance Guidelines, which define the key policies and rules of the Board's operations.

The Board is chaired by the Chair of the Board. The Chair of the Board is instrumental to make the division of power and responsibility as effective and inspiring as possible. The Chair also has the power to influence, among other things, the following:

1. The atmosphere of the Board. It is important to create a psychologically safe atmosphere. This frees board members from the pressure to talk only about the very wise, which often limits the debate to the overly cautious. The free flow of thoughts requires an atmosphere of trust, where all views are valued. In a psychologically safe environment, the display of emotions is also allowed: the best teams display emotions, both positive and negative. This is the way to get the most out of the Board, which often holds ample experience and wisdom.

1. High-quality meetings. Board members can be given homework, and the agenda is worth paying attention to. What really needs to be dealt with for the company to develop in the desired direction? Meetings should focus on the future: everyone reads about the past in the reports, and they are interesting because they can be used to consider the best approach to future decisions.
2. Decisions based on information and analysis. A good Board is constantly mapping alternative future scenarios for the company. This may seem tedious, but it is quality board work when it comes to managing risks and heading towards opportunities.

4. Supporting the management team. The Board succeeds when the management team succeeds. Board members can be expected to share their areas of expertise with members of the management team; this kind of insight is very valuable in developing the company's operations.
5. Spending time together also outside of meetings. A Board is a team, and it is worth investing in team building, getting to know each other and building trust. This is the only way to inspire a shared spirit and enthusiasm for doing things, and favour the company's success through the strengths of individuals.

Finally, a good Chair of the Board is professional, friendly and attentive, and can not only appreciate the diverse expertise of Board members, but also keep meetings firmly on schedule.