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- The chair’s workload is increasing as boards face more intense regulatory, governance and stakeholder scrutiny.
- Work overload could drive a chair to focus on process and compliance rather than strategic discussion and decision making. A deputy chair and appropriate committees can provide support.
- A workload audit could identify other ways to share the burden of responsibility.
Today’s chairs face increased scrutiny as they navigate more complex regulation, risk and stakeholder expectations. How can the board help them succeed?
Board chairs have seen their roles and responsibilities expand dramatically over the past few years. The Deloitte report Board effectiveness and the chair of the future describes it as “a job that’s become all-encompassing”.
“The time commitment required continues to increase as regulation relating to governance, risk and social issues becomes more complex,” says Paul Masi MAICD, an experienced director and chair of Greenwich Capital Partners.
Chairs are expected to stay across emerging risks. At the same time, as Genevieve Hawkins GAICD, business adviser and experienced director, points out, the level of uncertainty in the world is making it harder for them to plan.
“For Australian companies, cyber risk has grown significantly in recent years, and now AI is demanding more oversight,” she says. “New laws require employers to pay much more attention to workers’ mental health and psychological safety, and good workplace culture and ethical behaviour are a constant. Understanding and minimising environmental impact is also now a given.”
The process trap for board chairs
There’s a risk that an overburdened chair will spend too much time on process.
“It’s easier to focus on process as it’s more tangible,” says Masi. “Real strategy requires tough trade-offs and accepting risk. But it’s not just the chair’s workload that will determine how time is allocated, it’s also the board’s culture. Many members like to “hide” in the process.”
So, are we dealing with a genuine structural problem or is there a simpler explanation – poor time management, for example, or taking on too many commitments?
“I see it as more as a change in the role rather than a structural change,” says Masi. “Yes, too many board roles could be to blame. I’ve met directors whose main focus is the money and status and, as such, want the title more than they want to do the work.
“Then again, some people are amazing at what they achieve with the same 24 hours we all have. Most of us do our best to plan ahead. It’s just an ongoing process of trying to deal with things in real time rather than letting them build up.”
Preparing directors for the chair role
There’s also a risk that the increasing workload will discourage directors from taking on the position.
“Already, in the not-for-profit space, the chair role is particularly difficult to fill,” says Masi. “The extra commitment in terms of work and time makes it much harder for directors to commit. In the commercial space where I operate, private SMEs, the role is really driven by the controlling investor.”
More broadly, Hawkins is optimistic.
“I see many experienced executives who are interested in portfolio work and there are many capable future chairs who simply need their first opportunity,” she says. “Every chair should be developing at least one director to build their skills to that leadership level.”
Five ways to ease the pressure on chairs
1. Share the load
Rather than struggling to carry the governance burden alone, a chair might be able to organise the board to spread the responsibility.
“Workload-sharing has value, but the organisation must start by clarifying its own complexity and defining the demands and expectations it places on the chair.,” says Hawkins. “Chairs also need to be clear about what is sustainable for them.”
A workload audit can streamline the process by pinpointing where the role has expanded, where the chair is spending time and identifying any work that could be delegated.
2. Delegate more to committee chairs
By specialising in technical or complex issues, strong committees can prevent the chair from being swamped by too much detail. However, the chair must walk a fine line. If committees take on too much responsibility, the full board may lack the information it needs to maintain effective oversight.
“In small companies and NFPs, committees are less useful as they can become a layer of duplication,” says Masi.
3. Appoint a deputy chair
A deputy chair can provide practical support. As well as standing in for the chair as needed, this could include chairing the board committee or board meetings or sharing the burden of work and travel commitments.
4. Check the capacity of a would-be chair
If they don’t already, nomination committees should question the capacity of a potential chair.
“Selecting a chair should be based not only on the person’s skills, but on the time required and their competing demands,” says Hawkins.
5. Fee structure
Masi doesn’t believe the pay premium for being chair reflects the additional workload. However, as Hawkins points out, it could be difficult for remuneration to keep pace with rapid change.
“While chairs may deserve higher remuneration, simply paying them more won’t solve the underlying problem of having more work than capacity,” she says.
More practically, restructuring fees for people such as the company secretary, committee chairs and governance support staff could help provide an extra layer of support.
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