Described by some as the “ultimate chief reputation officer,” the board chair plays a unique role in the long-term success of an organization by carefully balancing the relationship between the board and senior management. The Deloitte Global Boardroom Program recently conducted interviews and surveyed over 300 chairs across 16 countries to better understand the current demands of this role, uncover the areas requiring leadership, and suggest “key practices” for chairs that can maximize future performance of the organization.
- Increased governance. Chairs are involved in a wider range of topics, providing guidance on the company’s response to social issues, culture and transformation.
Key practice: The report advises chairs to encourage management to be bolder and faster in identifying risks and opportunities in business transformation - without over-managing.
- Deeper focus on corporate responsibility. Greater attention is placed on an organization’s impact on society and the expectation that they contribute to solutions that impact communities. Chairs think about their responsibilities in the context of all stakeholders which adds complexity to decision-making.
Key practice: Chairs should play a key role in engaging stakeholders and supporting management to organize industrywide solutions. For example, the report suggests, they can add societal concerns to the board agenda where relevant.
- Prioritize climate on the agenda. Chairs have elevated this topic on board agendas with a focus on risk management and long-term improvement strategies. Educating the board on climate challenges is critical.
Key practice: Strong partnerships with the CEO, management and the board are needed to determine who will set the strategy and how it will be implemented.
- Operating in crisis mode. Chairs cited crisis management as the new norm and stressed the importance of agility in the how they consider the issues and respond.
Key Practice: Shorter, more frequent, virtual meetings pave the way for boards to quickly partner with management on urgent matters. Keep an eye on the future by understanding how emerging technologies can enable transformation of business models and plan for the unexpected.
- Hybrid Effectiveness. Boards went through the growing pains of operating virtually during the pandemic and chairs have acknowledged the pros and cons of remote meetings. Consider what topics are best for in-person discussion versus virtual to make the most of their time together.
Key practice: Streamline agendas with pre-read materials and focus on building a team where everyone can contribute by building respect, trust and consensus.
The Deloitte study ends with some practical advice for sitting or future chairs, noting they “must steer the longer-term strategic direction without overstepping; manage the board while encouraging debate and a multiplicity of views; support management while challenging their assumptions; and engage a wide range of stakeholders without being hijacked by every demand.”