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What Makes an Exceptional Chairman?

In an era of economic crises and continual change, the role of the chairman has become more crucial than ever. Chairmen must ensure long-term corporate success through good times and bad, but the continued volatility of the economic environment imposes greater responsibility and a higher profile on their role. When things go wrong, the chairman can be first in the firing line.

Alvarez & Marsal (A&M) has published a report which reveals the distinguishing characteristics of successful chairmen. What Makes an Exceptional Chairman: Required Qualities for Challenging Times is based on the collective insights of 22 highly experienced chairmen of FTSE 100 and 250 companies, and other high profile bodies, who have drawn on their experiences of working with more than 120 chairmen in their careers. Participants in this research programme include current CBI President Sir Roger Carr and Financial Reporting Council Chair Baroness Hogg.

A&M’s research shows that exceptional chairmen never consider themselves a one-person success story. They know that companies flourish due to a combination of strong board leadership and thoughtful chairmanship, together with rigorous implementation of board management principles.

Key findings of our report include:

1. Exceptional chairmen focus on providing strong, active leadership of the board team, shaping strategy and taking tough decisions. This contrasts with the more accepted picture of chairing a board of respected individuals, providing oversight, risk management and good governance.

2. “The Eight Behaviours” of exceptional chairmen identified in our research outline a different set of priorities from much of the existing guidance. These characteristics provide a more granular look at what is required, and stress the application and integration of broad business skills into strong board leadership.

3. Greater clarity on the role of the chairman in terms of planned change, turnaround and crisis. One size doesn’t fit all – for instance, there is often a key decision whether to appoint a turnaround chairman versus a renaissance chairman with a longer-term focus. Regardless of the choice, it is clear that the days of the status-quo or ill-prepared chairman are over.

4. Equipping tomorrow’s chairmen for the future. Today’s newly appointed chairmen have limited forums in which they can acquire the skills necessary to become truly exceptional chairmen. There is a need for more guidance on active board leadership, alongside good governance requirements already identified through the Financial Reporting Council’s guidance. Complemented with mentoring by the existing outstanding chairmen, tomorrow’s chairmen would be better equipped to apply these skills for the future.

Download the complete report here.