*Chairs are a key lever in upgrading the performance of boards*
Results from a recent survey on LinkedIn echoed an earlier poll at the Asia Corporate Governance Association conference in a panel on Board Behavior, grading the performance of the board without strong leadership at the top is an uphill battle.
Great Chair are essential to maximizing board diversity and creating an environment of constructive challenge and engagement in the boardroom. They harness the efforts and talents of the wider board in ensuring good governance. At a very basic level, they ensure meetings are run well and productively, which ensures optimal performance of the board. Research by Professor Kasper Nieslen on the value of INEDs confirmed Chairmen have a noticeable effect on stock price value.
How does a great independent Chairman do this?
At a recent FT NED Better Board breakfast, Chris Bennett told a story about a Chairman who sits on boards in both Malaysia and Australia. In Malaysia, where power distances are high, he solicits input from the most junior member of the board first and goes around the board table, leaving himself as the last board member to share his views. In Australia, where power distances are low, he will throw out his idea or problem at the beginning and watch his fellow directors pick it apart.
Great chairmanship includes listening, soliciting input, and understanding your board and company culture. Transformational leadership at its best.