I’ve been spending time with some of the best board chairs I know to ask them what they do.
I spoke to David Thodey. He was chair of CSIRO at the time and is currently chair of Tyro and Xero. I shared my favourite tip from him in part one. He also opened my eyes to the most important hat I should wear in my role as chair.
As directors, it is not our job to manage the company
It seems obvious, but few operate this way. Boards don’t work well when the chair plays the table-stamping decision maker role. While the CEO reports to the board, which is led by the chair, this does not mean that the operation of the board is the chair pushing their own strategy for the company.
The chair’s role is to guide the collective of directors to support the strategy, to question and poke, to govern the process. When a director begins a sentence with “What we should do is…” here’s what happens.
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1. They strip the management team of agency and confidence
The role of the CEO and their team is to decide what the company should do. Boards that constantly tell CEOs what to do become boards where CEOs come to meetings asking what the company should do. It creates a vicious circle that can erode confidence on both sides.
It also means that it is hard for the board to hold the CEO accountable for a decision because the CEO feels like it was the board’s idea.
2. They force a strategy imagined by people who know less
The chair and other directors are not in the trenches every day. Selling, speaking to customers and team, building the products, recruiting, raising capital. There is so much information that a CEO has, it is impossible to communicate a fully dimensioned WHY in a board meeting. Directors need to trust that this high bit rate stream is informing a strong hypothesis for a strategy.
From there, ask questions and tell stories of your experience that may inform.
The three other hats of the chair that need a deliberate ‘change of character’
Since I have tuned into the idea that as chair I am facilitating directors to support and strengthen the work of the management team, rather than to be an extension of them, it has profoundly changed my work as chair.
As an investor who is also generally involved at the very start of a company’s life, I often need need to wear other hats in the same meeting. I need to:
- Give my perspective as a director. Usually I do this when I have unlocked other perspectives;
- Provide ideas as a founder. Most of this should happen outside of the board meeting but sometimes there is a specific agenda item and question from the CEO; and
- Give my perspective as an investor in the company.
These are three different roles that I try to declare a change character — like an actor changing costume. I work hard to keep my chair hat on most of the time.
This article was first published on Phil Morle’s Typeshare.