By Matt O’Grady
August 14, 2024
Corporate boards have been with us for centuries. The 1694 charter for the Bank of England
included a board of 24 directors—and is, by one account, the first time the word “director”
appeared. From the beginning, the chair has been first among equals—setting the agenda,
chairing meetings and, of course, keeping tabs on the CEO.
Over the years, the role of chair has evolved—both in the scope of work and also the skill set
required to be effective. “The type of work boards are responsible for is much more involved
than in the past,” says Didier Cossin, founder and director of the IMD Global Board Center in
Lausanne, Switzerland. “The fiduciary responsibility is more visible, the social responsibility
higher—and the stakeholder engagement more in-depth and structured.”
Today’s chair needs to adapt their style to meet the moment, says Cossin. “We’re moving to a
world of conflict—of geopolitical conflicts, but also a conflict of values. And within that world of
conflict, boards need to be more team-like than they used to be.” Chairs, throughout it all, have
to help boards navigate tricky and often conflicting relationships. This includes the need to
engage activist investors, who have become central figures in boardroom battles.
“You still have investment bankers making a lot of money off preparing boards for activism in a
defensive manner,” says Cossin. “But the smartest boards have gone beyond that,” he says, pointing to three companies—ABB, AstraZeneca, and Nestle—where a proactive chair has
found activists a seat at the table.
Finding the right board chair
For recruitment firms looking to fill the chair role, the job description has become more
complex, according to Gregory Robinson, founder and managing partner of Sydney-based
Blenheim Partners, an international board and executive search firm.
“If I’m searching for a chair, what the pension funds are looking for is someone with a strong
ethical point of view, particularly around regulation,” he says. “The chair also has to be a
spokesperson for the company, so integrity has to be beyond question.”
While a chair often comes from within board ranks, search firms (working with a nominations
committee) are increasingly asked to find prospective directors who can be “chair ready” within
a few years’ time. When a firm parachutes in a chair from the outside, it raises questions about
the skills of the existing board, Robinson says—pointing to the example of Australian airline
Qantas, which earlier this year brought in an external chair, John Mullen, in the hopes of
reviving its flagging reputation.
Whoever is promoted to chair, team dynamics is critical to success. “It’s not just about skill sets;
it’s about the fit,” says Robinson. “From a search perspective, we do an enormous amount
more work in validation and referencing than we used to.” That’s especially true in the era of
Twitter screeds and errant Facebook posts, he adds: “Faux pas on social media from five or 10
years ago—they’re unforgivable. And now you can’t hide from it.”
Source: The Modern Board With exclusive content by Fortune by Diligent