Chairmen fret & moan in buzzwords according to Deloitte Report
THOUGH the mood music and latest challenges notionally change, the role and responsibilities of an effective chairman still remains roughly the same with regard to relationships with investors, the CEO and running an effective executive board.
The recent crystal ball gazing research exercise and report of professional services firm Deloitte (Chair of the Future: Supporting the next generation of business leaders) is based upon anonymised and summarised conversations with various different FTSE 100 chairmen. Arguably, the Deloitte Report falls short on new practical proposals while also appearing to quote various chaps who want to resile from some allegedly burdensome aspects of current corporate governance legislation and regulation.
Though an important topic to consider and investigate, the Deloitte report appears to favour grandiloquent descriptions rather than providing a sensible checklist of responsibilities to guide current behaviours and practice, let alone landing any future prediction punches. Obviously, the need for anonymity was a factor but it is unfortunate that Deloitte still prefer to describe possible impacts of the chairmen much too grandly and reassuringly (“company ambassador”; “strategy provocateur”; “Chief Reputation Officer”). There is understandable but coded talk about challenges - albeit in rather aggrandizing buzzwords (“’symphonic C-suite’ executives”; “overboarding”; “fourth industrial revolution”; “seismic shifts”; “innovative disruption”) - while the speed of current change is mainly presented as an excuse for hand-wringing anxiety (“unrestrained transparency”; “upsurge in stakeholder management”). Deloitte clearly intend not to critique never mind scare the (possible client) horses it consulted, while complacently but obliquely asking – in a different standout typeface - for a pay rise request on their behalf (“I am quite worried about the best people not wanting to be on PLC boards for £50k a year”).
But, more worryingly and worse still, Deloitte appear to want the present on behalf of the future to row back from the current often lax – if judged by the frequency of corporate scandals or the subsequent adjudications and punishments issued - regulatory environment. Apparently without demur, Deloitte note, ‘some respondents offered the view that increasing complex regulation and compliance was the greatest threat to the attractiveness of the UK as a global location to headquarter businesses.’ Deloitte also quote (in a larger typeface for additional emphasis) the hard to substantiate claim that, ‘increased legislation and rules-based governance may be a bigger threat to the attractiveness of the UK as a place to list your business than Brexit.’ This pandering to the real or imagined needs of vested interests ill serves any research exercise – no matter how brief, anonymous or anodyne - looking into the future role and responsibilities of the chairman. Clearly companies and businesses require the guidance and leadership an effective chairman can offer. Irrespective of current business fashion or worries, these skills, experiences and capabilities continue to remain as they appear in my book and are studiously buzzword free as listed below.
Role of the chairman
– Organisation of the composition, business and efficiency of the board
– Leadership of the board in strategy determination and measuring the achievement of
business objectives independent directors
– Ensuring the board has accurate and clear visibility of results achieved and likely future
– Ensuring the board committees are properly established, composed and operated
– Ensuring with the CEO that effective relations are maintained with all major stakeholders
including shareholders, customers and employees
– Enhancing the company’s public standing and overall image
– Developing a strong working relationship with the CEO
– Facilitating the effective contribution of Independent directors and ensuring constructive
relations between executive and independent directors
– Arranging the regular evaluation of the performance of the board, its committees and key
Qualities required of the Chairman
– Statesman/strong reputation, particularly in financial circles
– Long-term view of the business
– Perceptive reader of people/strong in empathy
– Excellent facilitator in shaping debates
– Long-term experience in dealing with institutions and regulatory authorities
– Financial acumen
– Strategic thinker
– International business experience
– Team leadership skills
– Company chairmanship experience
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