What Does A Board Chair Do?
My friend Andrew Williamson of Cambridge Innovation Capital and I were discussing the process for hiring a board chair for one of our co-investments. Prior to bringing on the new chair, I asked Andrew if he considered serving in the role himself, since his firm acts as the “lead investor” in the startup.
It surprised me to learn that in the U.K., it is extremely uncommon for investors to serve as board chair — it is nearly always an external, or “independent” director in this role.
In contrast, in the United States, the board chair is often the founder, the CEO, or the largest investor. The role tends to symbolize power and prestige, more than responsibility. But based on my experience having served as chair for multiple startup boards, I would say that in America we have it backwards.
This belief is based on what’s required to serve as chair. Here’s how I would describe the role:
- Coordinate with management and the rest of the board to ensure the correct agenda is set for board meetings, and that legitimate topics that should be addressed by the board are prioritized on the agenda
- Run the meeting, stick to the agenda, and see that it is conducted on time
- Ensure that everyone is able to participate to execute their duties as directors, including making sure that no one person monopolizes the board conversation
- Include legal representation as needed, or appoint a secretary to take minutes during the meeting, such that decisions are memorialized according to legal requirements for board meetings as specified in the company’s bylaws
- Encourage a team dynamic at the board level, such that the directors can operate in a high-functioning manner — this role includes fostering any social activities, like board dinners, when appropriate
- Solicit, synthesize, and deliver feedback on the meeting from all non-management directors, such that the board can speak to the CEO with “one voice” about the strategic direction of the company
In short, the role of the chair is not really about getting credit, nor being acknowledged as the smartest or most important person in the room. It is a service function, akin to a referee. To be an effective board chair, superlative communication skills are required.
The U.K.’s model makes sense to me, because it resolves potential conflicts of interest. It can be difficult to be the person providing the majority of the content in a meeting (usually the CEO) while also moderating and ensuring participation (the job of the chair). The CEO often finds himself or herself fielding questions, sometimes from adversarial directors, and it’s tough to defend your ideas and performance while also ensuring a level “playing field” in terms of discussion. Yet in America, CEOs often seek both of these roles at the same time. This may reflect a lack of understanding of the actual purpose and function of the board of directors.
I first met Gerri Elliot at the National Association of Corporate Directors. She is the head of marketing & sales at Cisco, and serves on the board of Whirlpool. Gerri has extensive board experience and developed a list of 12 attributes of an effective director that apply to public and startup boards alike:
- Do not hesitate to ask hard questions
- Work well with others
- Understand the industry
- Provide valuable input
- Be available when needed
- Be alert and inquisitive
- Have relevant business knowledge
- Contribute to committee work
- Attend meetings regularly
- Speak out appropriately at board meetings
- Do your homework and prepare for meetings
- Make meaningful contributions
The board chair should exemplify these attributes and bring out the best in all other directors to do the same. In many ways, the role of the chair reflects the overall role of the board, which is less about taking charge than protecting stakeholders who are not in the room. Directorships are a representative form of governance, requiring a fiduciary mindset.
As Carly Fiorina, former CEO of HP, noted:
“A true leader serves, not presides. They are empathetic, and they collaborate to make informed — even unpopular — decisions. Leaders understand that culture matters and leadership is a team sport.”
At Uber and WeWork, the founders were stripped of the chairman title following scandals. While the decisions may have been appropriate, the press reported these role changes as a form of punishment, reinforcing the unfortunate notion that the position of board chair is a benefit instead of a responsibility.
I recently resigned my position as board chair of a private company named BOOM! Studios, a leading comic book company in which my firm has an investment. I served in this role for approximately a decade, and while I’m maintaining my directorship, it was time to groom another chair to take on the responsibility of leading the board.
The company’s founder, Ross Richie, was also ready to step out of day-to-day operations because he had recruited and promoted a team to run the core business of comic book publishing and media translation to film and television. As an entrepreneur, his passion lies in driving new business opportunities outside the day-to-day, and we all felt he could accomplish this best from a strategic perch. Most importantly, our board also believed that he was ready to adopt the service mentality and fiduciary mindset that’s required of the board chair. This is exemplified by one of the first questions he asked me: “how do I do a good job in this new role?”
This can be a difficult transition for startup founders especially, because of the drive that’s required to found a company and keep it alive. Founders are accustomed to having both hands on the wheel, making all the decisions, and being the star of the show. These characteristics that typically correlate with being a successful founder are often diametrically opposed to the low-ego approach of service, balance, and fair play.
By stepping out from the “lather-rinse-repeat” formula of an operational role, Ross has not only opened up new opportunities for the company, but he also solved the conflict of simultaneously presenting while presiding. In his new role as chair, he’s able to focus on ensuring the most important topics receive attention, and on supporting the management team in their own professional growth and success.
Further to this point, I was fortunate to work with Sameer Dholakia when we were both at Trilogy Software in the late 1990s. Several years ago Sameer was recognized as the top rated startup CEO for his his style of leadership running Sendgrid, which was acquired by Twilio for $2 billion. Sameer has indicated he believes a leader’s primary role is to empower others, inspired by his mother’s philosophy:
“As a young kid, I grew up in a family where my mom had a worldview that life is about giving, not taking.”
That service mentality can contribute powerfully to the success of a startup when applied to the roles of CEO, the board of directors, and especially the board chair.
This article was originally published in the NACD Directorship print magazine.
Liked what you read? Click 👏 to help others find this article.
Unless otherwise indicated, commentary on this site reflects the personal opinions, viewpoints and analyses of the author and should not be regarded as a description of services provided by Touchdown or its affiliates. The opinions expressed here are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual on any security or advisory service. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice. While all information presented, including from independent sources, is believed to be accurate, we make no representation or warranty as to accuracy or completeness. We reserve the right to change any part of these materials without notice and assume no obligation to provide updates. Nothing on this site constitutes investment advice, performance data or a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Investing involves the risk of loss of some or all of an investment. Past performance is no guarantee of future results.