Guide to effective board leadership
DEAR esteemed board chair, your leadership plays a crucial role in shaping the direction and success of your organisation.
With increasing scrutiny and expectations placed on boards, understanding the essential practices and qualities that distinguish an ideal chairperson is paramount.
Backed by research and insights from experts, this article serves as a guide on what an ideal chairperson should do and avoid doing to steer the board effectively.
Essential practices
Strategic vision: A study by Mckinsey found that effective chairpersons prioritise a long-term vision and strategy. As a chairperson, you should steer the board to focus on long-term value creation and strategic initiatives that align with the organisation's mission. Strong governance: A National Association of Corporate Directors survey revealed that 98% of directors believe effective governance practices are crucial for board success. Ensure the board adheres to strong governance principles like transparency, accountability, and ethical decision-making.
Diverse and engaged board: Research shows that diverse boards generate better financial performance and strategic outcomes. As a chairperson, actively foster an inclusive environment by promoting diverse representation and encouraging diverse perspectives. CEO support and oversight: A report by Harvard Business Review found that 70% of successful chairpersons maintain strong relationships with the chief executive officer, balancing support and oversight. Establish a productive working relationship with the CEO, providing guidance and monitoring performance without micromanaging. Effective communication: e PWC Annual Corporate Directors Survey indicated that strong communication between directors and shareholders is essential. Maintain open and transparent communication among board members, shareholders, and stakeholders to foster trust and alignment.
Encouraging dissent and open discussion: Research has consistently shown that successful boards are chaired by leaders, who create an environment where dissenting voices are heard, and all topics are open for discussion. As a chairperson, encourage constructive debate and critical thinking, allowing board members to voice their opinions and challenge assumptions. is fosters a culture of transparency, promotes a deeper understanding of complex issues, and leads to more informed decision-making.
Practices to avoid
Micromanagement: A study by the University of Zurich found that micromanagement can harm employee performance. Avoid micromanaging the CEO or board members, which can hinder decision-making and effectiveness. Unethical conduct: e EY Global Integrity Report emphasised the importance of ethical leadership in building trust and promoting integrity. Refrain from unethical practices, which can severely damage the organisation's reputation and create legal risks.
Ignoring stakeholder interests: Ignoring stakeholders' interests can lead to reputational damage and loss of trust (Harvard Law School Forum, 2020). As a chairperson, ensure stakeholder concerns are considered in board discussions and decisions.
Resistance to change: A survey by KPMG showed that board of directors must be open to change and innovation. Avoid resisting change or new ideas, limiting the organisation's growth and adaptability.
e statement "A good chairperson is one with an empty mind" suggests that an ideal chair should approach their role with an open and flexible mindset, allowing them to adapt to changing circumstances and make informed decisions without being rigidly tied to preconceived notions or ideas.
It encourages board leaders to be receptive to diverse perspectives, new information, and innovative ideas from fellow board members and management.
In this context, an "empty mind" does not imply ignorance or lack of knowledge but rather the ability to listen attentively, analyse situations objectively, and make well-informed choices. A chairperson with this quality is better equipped to facilitate productive board discussions, manage conflicts, and steer the board toward its strategic goals.
Conclusion
Your leadership as board chairperson is pivotal to the success of your organisation.
By focusing on strategic vision, robust governance, inclusive diversity, CEO support, and transparent communication, you empower your board to make impactful and ethical decisions.
Crucially, avoid the pitfalls of micromanagement, unethical conduct, disregard for stakeholder interests, and resistance to change. ese proactive leadership choices foster an environment where growth and innovation can thrive.
Remember, your actions as chairperson profoundly influence the lives of employees, stakeholders, and the wider community – guide your organisation toward a future defined by excellence and responsibility.
Nguwi is an occupational psychologist, data scientist, speaker and managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and human resources consulting firm. — https://www.thehumancapitalhub. com or e-mail: mnguwi@ipcconsultants.com.