Becoming the chairman of a company is one of the most prestigious and challenging roles in the corporate world. It requires not just ambition but a strategic vision, exceptional leadership abilities, and the ability to navigate boardroom politics.
As the chairperson, you’re responsible for overseeing the board of directors, guiding the company’s long-term strategy, and ensuring corporate governance aligns with the organization’s mission.
In this guide, we’ll explore actionable steps and essential leadership tips that can help you transition into this significant role. Whether you’re currently a senior executive, a member of the board, or simply aiming for leadership at the highest level, this guide will give you the insights and strategies you need.
What is the chairman’s role?
The chairman of the board holds the highest position within the board of directors. While the chief executive officer (CEO) is responsible for the company’s day-to-day operations, the chairman’s role is more strategic and governance-focused.
Key responsibilities of a chairman include:
ey responsibilities of a chairman include:
- Board leadership. The chairman is responsible for leading board meetings and ensuring they are effective, transparent, and aligned with the company’s goals.
- Corporate governance. They ensure the company adheres to all governance policies and that the board of directors acts in its best interests.
- Decision-making. While the CEO handles operational decisions, the chairman sees that the broader strategic direction of the company is sound.
- Facilitating relationships. The chairman must maintain strong relationships with non-executive directors (NEDs), executive leadership, and key stakeholders.
Case in point: Larry Fink, the chairman and CEO of BlackRock, manages one of the largest investment firms in the world. His dual role showcases how a chairman must balance high-level strategy with governance while his leadership helps the board function cohesively.
What’s the difference between the chairman and the CEO?
The chairman and the CEO hold distinct roles within a company.
The chairman leads the board of directors, overseeing the company’s overall direction and ensuring the board functions properly.
The CEO, on the other hand, is responsible for the day-to-day operations of the business, executing the board’s strategy, and managing the executive team.
While the chairman often serves in an advisory capacity, the CEO is actively involved in running the company. Both positions work together, but their responsibilities and authority differ significantly, with the chairman focused on governance and the CEO on management.
Leadership skills of a good chairman
Leadership skills are the foundation of any successful chairman’s career. The chairman must lead with authority while maintaining harmony within the boardroom, which is often composed of diverse and influential individuals.
Here are the key skills to master:
- Effective communication. You’ll need the ability to articulate ideas clearly and foster open dialogue between board members is critical.
- Conflict resolution. A chairman must know how to resolve disputes between board members, senior executives, or shareholders, particularly when dealing with conflicts of interest.
- Decision making. Strategic decisions about the company’s direction often fall on the chairman. Understanding the broader market, financial reports, and the company’s goals is crucial in making informed decisions.
- Corporate governance. You must make sure that the company operates ethically and within its legal framework, adhering to bylaws and maintaining fiduciary responsibility to shareholders.
- Team management. Leading and inspiring the management team and other members of the board requires tact and vision.
Here’s an example: Former General Electric chairman Jack Welch was known for his decisive leadership. Under his chairmanship, GE became one of the most successful corporations in the world.
Welch’s ability to navigate boardroom challenges, inspire confidence, and make tough decisions helped him maintain a competitive edge throughout his tenure.
5 Steps to become a successful chairperson
Becoming a chairman requires building a strong leadership track record and gaining the trust of your board members and stakeholders. These steps will help you on your journey:
Step 1. Build senior leadership experience
Aim for key roles such as:
- Chief executive
- Executive director
- Non-executive director
These positions will give you a comprehensive understanding of corporate governance. In these roles, demonstrate your ability to think strategically and lead at a high level. Show that you can handle complexity, ambiguity, and pressure.
Step 2. Develop corporate acumen
Understanding the intricacies of corporate culture is essential. A chairman must balance the company’s internal dynamics with external pressures.
Learn to interpret financial reports, conduct strategic planning, and guide the company in achieving both short-term wins and long-term goals.
Step 3. Cultivate relationships with key stakeholders
A successful chairman knows how to maintain strong partnerships with stakeholders, both within the company and externally. This includes managing relationships with the board of directors, investors, and senior executives.
Always be proactive in your communication. Building trust early ensures smoother decision-making processes later.
Step 4. Gain boardroom experience
It’s essential to have hands-on experience in the boardroom. Look for opportunities to serve on company boards or nonprofit organizations to familiarize yourself with governance structures.
Take on leadership positions within the board whenever possible, such as chairing subcommittees or overseeing key initiatives.
Step 5. Contribute to succession planning
As a potential chairman, you’ll need to be involved in creating a strong succession planning strategy to ensure the company’s long-term leadership stability.
Mentoring future leaders within the organization shows you’re committed to the company’s future, a key trait that board members look for in a chairman.
Here’s a real-world example to illustrate: In his journey to becoming chairman of Microsoft, John W. Thompson gained extensive boardroom experience, including serving as chairman of Symantec. At Microsoft, Thompson succeeded Bill Gates as chairman in 2014, guiding the company through a critical transition period.
His leadership has been praised for balancing innovation and stability, helping to steer Microsoft into cloud computing and other emerging technologies while ensuring solid corporate governance.
Best practices for securing a chairman position
Transitioning from a senior executive or board member role to a chairman position involves more than just experience. Here are actionable tips that can give you an edge:
Master boardroom dynamics
Navigating the complex relationships within the boardroom is a must. As chairman, you’ll need to manage personalities, resolve conflicts, and ensure that the board is working cohesively.
Practice active listening and remain impartial during board meetings. Leading with fairness ensures that all voices are heard, but the company’s best interests remain at the forefront.
Understand audit committees and financial oversight
A chairman must work closely with audit committees and the company’s financial officers to ensure transparency and compliance with regulatory requirements.
Deepen your understanding of corporate finance so you can provide insightful guidance during financial reviews and audits.
Build your personal leadership brand
To secure a chairman role, having a strong personal brand is essential. Your personal brand should showcase your leadership skills, corporate governance knowledge, and ability to lead a board.
Increase your visibility by speaking at conferences, webinars, or board-level forums on topics such as corporate governance, strategic decision-making, and leadership development.
Public speaking engagements position you as an expert and help build credibility within your network.
Make your track record known by highlighting successful initiatives you’ve led, especially those related to corporate governance, financial oversight, or board leadership.
Case studies or examples of your successes help demonstrate your ability to lead at the highest levels.
Leverage LinkedIn for networking and visibility
Building a strong professional network on LinkedIn can open doors for chairman positions in both the corporate and nonprofit worlds.
Actively engage in discussions relevant to corporate governance and share insights on leadership. Highlight your achievements and leadership skills to position yourself as a thought leader.
Tailor your approach for different companies
Chairmanship in a startup looks different from that of a large public company. In startups, you’ll need to take a more hands-on approach to guide growth and innovation.
Adapt your leadership style based on the company’s needs. A startup may require more active involvement in strategy, while a public company may need a chairman focused on governance and long-term vision.
For instance, Meg Whitman (the former chairman of Hewlett-Packard) successfully led the company through a challenging period of transformation. Her experience across both startups and established corporations gave her the versatility to adapt her leadership approach based on the company’s evolving needs.
Leading the way to chairmanship
Becoming the chairman of a company is a journey that requires a blend of leadership, strategic insight, and a deep understanding of corporate governance. By honing your skill sets, gaining experience in succession planning, and building relationships with stakeholders, you’ll be well-positioned to take on this prestigious role.
Leadership is a continuous learning process. Whether you’re already in a senior executive role or just beginning your journey toward the chairman position, it’s essential to keep growing your leadership skills and expanding your network.
To further develop your leadership abilities, consider enrolling in IMD’s “High-Performance Boards” program. This program is designed to equip you with the tools needed to excel as a board member and chairman, focusing on corporate governance, decision-making, and leadership strategies that drive board effectiveness.
Looking to develop your leadership skills as a chairperson? Explore IMD’s “Chairperson Board Training” to gain valuable insights and enhance your expertise.
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