It is a curious aspect of chairing a board that the person who performs this role – even in a large and well-known company – generally only emerges from behind the scenes when things go wrong. Countless examples exist of chairpersons hitting the headlines in such instances as an environmental disaster, or a chief executive’s failure to deliver a strategy.
Otherwise, it would seem to be an almost invisible role, and one still predominantly performed by men. However, the chair of a board can still exercise great influence over an organisation and those who run it, and therefore the firm’s ultimate success.
As stated by a recent research report from INSEAD business school: “They have no executive power but preside over the most powerful body in the organisation – the board of directors. Their performance is critically important for every company but they still need help to improve it. Yet they have no boss, no peers, no one to turn to for advice. They learn mostly by trial and error.”
What research is INSEAD undertaking?
As explained by two members of the research team in the report’s preface, the study is part of efforts to understand the aforementioned paradoxical situation that those chairing boards face.
INSEAD’s work began with the launch of a program called ‘Leading from the Chair’, which brought together international leaders on a twice-yearly basis to discuss common challenges.
The Global Chair Research Project was then developed, involving the participation of more than 600 chairpersons in a survey that in 2015 provided vital insights into “their demographics, motivation, background, remuneration and the challenges they encounter.”
The current project is expected to be completed before the end of 2017, and is being undertaken by the INSEAD Corporate Governance Initiative with the Talent Equity Institute, the research arm of Moscow-based consultancy Ward Howell. It seeks to further develop the 2015 study’s findings through the identification and comparison of specific practices and instruments used in different countries.
Crucial insight into the chairpersons of today
Amid the understandable differences that the study detected between the countries observed – which included the likes of the UK, Italy, Belgium, Denmark, Switzerland and the Netherlands – certain trends were apparent.
These included a tendency for more women to chair boards – albeit, remaining a minority everywhere even by 2027 – as well as greater numbers of people in their 40s taking on the role. It is also thought that there will be increased external pressure on those in the chair, who are expected to have shorter tenures, with fewer of them chairing more than one corporate board.
The research also indicates that the future will see heightened numbers of “professional chairs” – those who take on such a role for a living. In addition, it is expected that future chairs will work more with stakeholders such as shareholders and management, but that the board will remain their main focus.
Succession planning is also likely to become a more central part of a chairperson’s work, and it is anticipated that technology will actively move into the boardroom, becoming one of the chair’s main tools. This may manifest in an increasing tendency for board meetings to be held online, as well as the ever-greater preparation, distribution and storage of materials in digital form.
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November, 2017