The Role of a Chair

At EquityChair we ensure we understand candidates in respect of their business acumen and their fit with particular management teams. Having a great CV is no guarantee of success as a Chair if the chemistry is not right between the Chair, the management team and the investor.

The Chair’s role is multi faceted and every opportunity will have different Chair requirements. However, we have identified a number of areas that we see as crucial to the role of a Chair.

First and foremost, the Chair leads the Board and is therefore responsible for ensuring there is a strategy in place for the business and that the Board is up to the task of executing that strategy.

This in turn leads to the Chair’s role in assessing the management team – both in terms of performance – ie whether they are capable of delivering the plan – and whether the board needs support ie hiring a Marketing Director to allow the MD to concentrate on running the business or bolstering the Finance function to provide the MD with a solid and competent Number Two.

Occasionally the Chair will need to get into the operational detail of the business and thus will need to ensure he/she has sufficient capacity in their portfolio to allow this when needed – ie when there is a possible acquisition or the business is bidding for a major contract.

The Chair of a private equity backed business can often need to act as a buffer between the investor and the management team, sometimes translating between the two parties. If there is a dispute between investor and management, the independence of the Chair is crucial to resolving this issue to the benefit of all the shareholders and the business in general.

Does the Chair need to have sector experience? There is no easy answer to this. There are certainly situations where sector is vitally important and others where it matters less. Would a business that is looking to expand internationally and has a Board comprised of executives steeped in sector knowledge benefit more from a Chair with sector experience but no international experience or a Chair with analogous sector experience and lots of international experience? As each opportunity is different, we like to push back with the Client as to what is really important to the future growth and success of the business. Often this is a combination of skills – sector, situation (eg growth, turnaround, internationalisation, acquisitions) and people skills.

The Chair is often the “unsung hero” of the business. One of the reasons why he/she can wield so much influence over the business is the fact that he/she has already been successful and is now at a stage where he/she does not need to take credit for a business doing well. He/she leads the Board through experience and persuasion. A good Chair helps facilitate the good decisions of others.