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Preparing for Chairmanship

Five arts organisations were represented at the 'Preparing for Chairmanship' round-table forum, hosted by KPMG Senior Manager Executive Search and Selection, Liz Crawford, and co-facilitated by Warren Tapp and David Fishel.

Overview of discussion

The forum revealed that Chairs require both practical skills and leadership qualities, in order to fulfil leadership roles extending from CEO mentoring to external relations.  Responsibility and time commitments were also covered.  Discussion also included practical preparations and ongoing improvements that can be undertaken by individuals considering or in a Chair role. 

Participants raised further questions in relation to sub-comittees, remuneration of board members, and Chair/board performance and tenure – leading to issues of Chair/Director recruitment and succession planning, the topic of BoardConnect’s next round-table forum.

David Fishel opened discussion.  Topics and points raised included:

What is the job – the Chair’s duty statement:

  • The Chair must at the very least be able to run a meeting well
  • Fundamentally, the Chair must also be a good leader – leadership can be learned
  • The Chair must lead in conjunction with the CEO, with a constant flow of communication in both directions
  • If ordinary board members dedicate 4-5 hours/month attending meetings, reading papers, delivering upon specific commitments agreed in meetings, attending performances etc, the Chair should expect to spend double this time to incorporate additional communication with the CEO and other board members, and quiet reflection, especially regarding ‘the big picture’
  • Chairmanship can be described as being where ‘the buck stops’ – in a recent legal case relating to the collapse of One-Tel, the judge ruled that the Chair could be held to have a higher duty of responsibility to the shareholders than other board members
  • That being said, Chairs are legally not any more powerful nor exposed to any more liability than ordinary board members

Leadership dimensions of Chairmanship:

  • Figurehead: the Chair acts as the company’s external figurehead – in an arts company this role is shared via prior negotiation with the Artistic Director; one model being appearances alongside one another with the Chair providing institutional endorsement for the AD’s artistic vision
  • Board leader: the Chair actively leads the board by allocating tasks to board members
  • CEO mentor: the Chair acts as a trusted counsellor for the CEO, providing support and advice between meeting.  The Chair should, however, monitor his/her mentoring relationship with the CEO to prevent attention being diverted into operational issues – particularly when the Chair may have taken a more hands-on role previously as a founding director
  • Board performance monitor: in addition to formal, annual board performance reviews, the Chair should speak with members individually at least once per year
  • Culture steward: standards of governance: the Chair sets the tone for the ethics, energy levels, positivity levels etc of the board – funding bodies are particularly sensitive to these qualities
  • Final responsibility: Sonnenfeld states that the Chair should elicit ‘robust consent’ from board members in relation to decision-making; one technique is presenting a ‘made’ decision, in order to elicit rational alternative views from members, through which a better decision can be reached – thus actively preventing the on-set of group-think.  This constitutes a ‘collegial, not compliant’ method of decision-making – the Chair must accept the method’s outcomes, even if they diverge from the decision originally proposed by the Chair

Warren Tapp continued the discussion.  Topics and points raised included:

How do you prepare for the role?

Though appointments to arts board often tend to involve a short lead time, the potential Chair should ask him/herself the following questions or seek the following information prior to appointment to the Chair role:

  • Do I have enough time – review of an annual Board calendar of full meetings, sub-committee meetings and events is essential.  The Chair must set an example of time commitment for other board members, especially as a basis for dealing a member’s repeated absenteeism
  • Meet with the CEO – particularly regarding governance protocols (eg limitations to contact with staff)
  • Meet with each board member to gauge their overall belief in the organisation etc
  • Review strategic plan, governance charter (includes protocols re minutes, action items etc) – a meeting with the board Secretary may be required to interpret some of these documents
  • Review results of recent board performance reviews
  • Review board meeting processes – especially to enable accurate response to members’ subsequent queries regarding meeting processes undertaken. 
  • Review (or develop) compliance checklist – i.e. a checklist to ensure the ‘right’ things are automatically done – enabling reporting on exceptions only in relation to current operations, with rest of board focus concentrated on future issues

As soon as possible following appointment to the Chair role, a Chair should consider:

  • Undertaking an AICD or AbaF course
  • Reading books, research via Google, consider setting up a library of resources for use of all board members
  • Confirming protocols of the board member role with board members – i.e. where our role stops
  • Articulating your personal/operating standards to clarify expectations of board members – and remember they are volunteers!
  • Pursuing further self-development – to earn the respect of the board
  • Identifying/finding a successor and a Deputy Chair

Qualities of the Chair:

  • Encouraging of the CEO and of each board member – and can in turn expect loyalty
  • Firm in ensuring the CEO and board members’ contributions meet expectations
  • Knowledgable – possesses a knowledge base and rapidly gains organisation-specific knowledge comparable to that of the CEO
  • Strategic – able to continually divert board discussion away from operational issues, supported by clear CEO and Chair position descriptions and the ‘right’ CEO.  Carver articulates this difference between ‘running the board and running the organisation’.

How do you improve in the role?

  • Learning to anticipate issues – ideally being 6 months ahead of the board, looking over the horizon
  • Talking to other Chairs
  • Finding a mentor
  • Seeking ongoing feedback from the CEO and other board members outside formal review structure
  • Continuing to gain knowledge
  • Opening your mind to change
  • Creating your own KPIs and measuring outcomes
  • Warren summarised: ‘be effective, don’t just warm the seat’

Participants raised other areas of query or concern, responded to by both David and Warren:

What is the role of a Patron?

  • Patrons are appointed from within the company’s stakeholder community in acknowledgment of their major commitment to the company, or appointed externally due to their existing reputation as a highly respected member of society
  • The patron’s role is rarely articulated outside appearing at the company’s public events/occasions

Are sub-committees effective?

  • Though there is no conclusive answer to this question, dividing board considerations into portfolios may lead to only one or two members addressing each key issue i.e. all other board members may not focus on the issue
  • The Chair has the right to attend all sub-committee meetings, if desired
  • Other structures such as the separation of the standard Chair role into President (external figurehead) and Chair (runs meetings), and the rotation of meeting Chairs were discussed, and generally felt to be a dilution of responsibility and continuity of purpose between meetings

Should board members be remunerated?

  • Via previous research interviews of volunteer board members, David reported encountering resounding opposition to proposed receipt of payment
  • However, a small stipend (e.g. $1000/year) may be valuable in setting an expectation for board members in relation to minimum commitment of time and effort
  • The idea of allocating stipends to ongoing board education/training was well received by round-table participants

How do you measure performance?

  • David referred participants to online notes from 2008 round-table ‘Talking About Art’
  • Arts companies are generally regarded to measure output, rather than outcomes i.e. 27 people attended the event, exceeding the target of 25 people vs 27 people attended the event, hated it, and intend never returning to a company X production
  • Measuring of outcomes requires in-depth market research which is cost-prohibitive for most arts companies, especially on an ongoing basis
  • Boards should consider these factors when setting CEO/AD or board KPIs

What is ideal tenure for a Chair?

  • Commercial rule of thumb is two consecutive three-year terms
  • Generally a board member should step down, or be encouraged to step down, when they cease adding value

Recruitment and succession planning:

  • David referred participants to upcoming round-table ‘Recruitment and induction of new board members’
  • Warren commented that existing supporters of the company are too rarely considered for board appointment, and that calls for expressions of interest can be easily distributed via existing customer/member communication networks eg newsletters
  • If the Chair/board does not recruit, the CEO generally will
  • While prior experience on the company’s board is valuable for the incoming Chair, a lack of prior experience may be outweighed by the Chair’s existing skill sets from other industries

REFERENCES

  • AICD, Chairman of the Board – A Role in the Spotlight, (AICD, Sydney, 2006)
  • Bentley, C.F., Handbook for Chairmen and Secretaries – A guide to meetings and management of clubs, societies and associations, (A. H. & A. W. Reed, Sydney, 1970)
  • Bosch, Henry, Conversations between Chairmen, (AICD, Sydney, 1999)
  • Carver, John, Boards That Make a Difference, 2nd edn, (John Wiley and Sons, San Francisco, 2006)
  • Fishel, David, The Book of the Board, 2nd edn, (Federation Press, Sydney, 2008)
  • Sonnenfeld, Jeffrey A, ‘What Makes Great Boards Great’, Harvard Business Review, September 2002.