BECOMING THE CHAIRMAN

The move from CEO to Chairman is a major role shift. Success requires a set of leadership qualities which few CEOs have exercised in their previous roles. In this article, the authors elaborate on the qualities of great Chairmen and how executives can prepare for this new governance role.

The qualities that make a great CEO do not make a great Chairman. The role of non-executive Chairman, long a fixture in European companies, is becoming increasingly prevalent in the United States (See below – The changing face of governance in the U.S. and Europe). The job of the Chairman is also increasing in importance and complexity, as companies grapple with more technological disruption, geopolitical instability, regulatory uncertainty and social transformation. These can be blind-spots for operating executives, who by design are incentivised to focus on shorter-term performance. As a result, non-executive Chairmen increasingly are leading transformations that go far beyond CEO removal. Shareholders and society at large look at the Board, led by the Chairman, as having ultimate responsibility for business failure or success, having picked the CEO and approved the strategy.

We will focus specifically on CEOs who are making the transition to being non-executive Chairmen, and giving up their executive role in the process. However, much of what we say about the challenges and skill requirements apply to CEOs who are adding the role of Chairman