Chairing the board: it's an empathy thing

2004

The traditional image of company chairs as arrogant, ill-informed fat cats will have to change if the health of UK plc is to be preserved, new research has suggested.

A study by consultancy Board performance experts, the Change Partnership, part of the Whitehead Mann Group, has looked at the personal qualities companies should be looking for in their board chairs.

With the role of board chair becoming increasingly high profile in the wake of corporate scandals and the Higgs reforms of boardroom practices, companies can no longer afford to have chairs who are not up to scratch.

“The role is changing and becoming increasingly demanding. A good or bad board chair can make all the difference,” report author and Change Partnership partner Susan Bloch told Management-Issues.

The study, What Makes a Great Board Chair?, interviewed 215 directors with board positions on FTSE 100 and 250 companies, as well as in large private companies, private equity companies and public sector bodies.

It drew up a list of the 10 core qualities needed by modern day board chairs.

In a more rigorous, competitive climate, just using old boy’s networks or inviting in friends or colleagues was often no longer good enough when it came to appointing a board chair, suggested Bloch.

This is despite the fact that research by Ernst & Young and recruiter exec.appointments.com in November reported that old boy’s networks remain the key mechanism for landing non-executive director roles.

The top quality needed, according to The Change Partnership poll, was the importance of having a good relationship with the chief executive, in other words someone with good interpersonal skills, self-awareness and empathy.

This view was backed in the report by Tesco chairman David Reid, who argued that the relationship with the CEO and being able to deliver both the strategy and vision of an organisation were vital attributes.

“In a business this means ensuring that the company has the strategies, the quality of management and all the resources – financial, human, technology – to create wealth on a consistent basis,” he said.

On top of this, board chairs needed to be able to juggle the conflicting demands of the press, investors and shareholders, stressed Bloch.

“You can have the best non-executive directors on your board but if there is a dysfunctional atmosphere you are not going to be getting the best out of everybody,” she said.

Being open to challenge and debate, promoting the idea of independent-minded directors, and looking continuously to improve selection and succession processes were other key qualities.

Similarly, governance post-Higgs has become much more of an issue, so board chairs need to understand the importance of annual reviews and give them the weight and credibility they deserved.

What Makes a Great Board Chair
1. A great Chair works well with the Chief Executive.
2. A great Chair achieves openness and transparency at the Board.
3. A great Chair works continuously to improve Board performance.
4. A great Chair runs a flexible process.
5. A great Chair has an open leadership style.
6. A great Chair was not the previous Chief Executive.
7. A great Chair has broadly based rather than sector specific experience.
8. A great Chair prepares for the role.
9. A great Chair is personally accountable for Board performance.
10. A great Chair balances regulation and strategy.

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