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Chair  |  ESG  |  Leadership (purpose, values, culture)

The evolving role of the chair in modern governance


In today’s dynamic corporate landscape, the role of the board chair has evolved beyond traditional governance responsibilities. With a growing emphasis on environmental, social, and governance (ESG) matters and increasing shareholder activism, the modern board chair faces new challenges and opportunities in steering the organisation towards sustainable long-term success. In this blog, we discuss the traditional and newer responsibilities of board chair.

Traditional and newer responsibilities of board chairs

The role of the chair is to lead and manage the board of directors. The chair ensures that the board effectively fulfills its responsibilities and makes informed decisions. Alongside the board members, he/she provides strategic leadership and oversight to the organisation. The chair is typically responsible for setting the agenda for board meetings, facilitating discussions and decision-making, and overseeing the overall operation of the board. But modern governance and the widened scope of board responsibilities have placed critical emphasis on the board chair role.

ESG matters

As businesses become more attuned to their impact on society and the environment, ESG matters have gained prominence in the boardroom. The board chair plays a pivotal role in setting the tone at the top, ensuring that ESG issues are integrated into the strategy and decision-making processes.

Engaging with stakeholders

In addition to leading the board, the chair plays a key role in representing the organisation to external stakeholders. Beyond just shareholders, stakeholders now include customers, employees, communities, and other interest groups impacted by the organisation’s operations. The chair often makes the liaison between the board and the organisation’s stakeholders. He/she facilitates communication and should ensure that diverse perspectives are considered in the board decision-making.

Navigating shareholder activism

Shareholder activism has gained momentum as investors increasingly demand greater accountability and alignment with ESG principles. The chair must be proactive in engaging with activist shareholders, embracing constructive dialogue, and understanding their concerns. Rather than perceiving shareholder activism as a threat, the chair may leverage it as an opportunity to drive change.

Promoting board diversity and inclusion

In line with the changing landscape of governance, the board chair is also responsible for promoting diversity and inclusion, notably within the boardroom. A diverse board brings a broader range of perspectives, drives innovation, and enhances decision-making.

As modern governance embraces the principles of ESG and stakeholder engagement, the role of the board chair takes on renewed significance. Beyond overseeing board meetings, the chair’s leadership in ESG matters, stakeholder engagement and diversity & inclusion, and responsiveness to shareholder activism shapes the organisation’s reputation and resilience. As they embrace this evolving role, board chairs can drive sustainable long-term success.

For those aspiring to take on the pivotal committee or board chair role, our comprehensive Chairship course offers guidance and insights to equip you with the skills and knowledge needed to secure a chair role and excel as a chairperson. Discover how you can step confidently into the realm of board and committee leadership by enrolling in our specialised course today.

Related resources:

Exploring the crucial traits of an effective chair

Board Best Practices®: Chairs

Written by Elise Perraud