Greater Challenges for Modern Chairman
Thursday, 25th May 2006 at 1:05 pm
Modern chairmen, both men and women, are facing greater challenges in terms of leadership, company performance and stakeholder communications according to a new report by the Australian Institute of Company Directors (AICD).
The findings are included in a new AICD publication called Chairman of the Board – A Role in the Spotlight.
The publication offers a detailed account of how chairmen approach their task of board leadership, with advice and personal insights from notable chairmen such as Coca Cola Amatil’s David Gonski, Australia Post’s Linda Nicholls and former Telstra Deputy Chairman John Ralph.
The publication provides chairmen’s views on building partnerships with chief executive officers, improving company performance from the boardroom, the qualities of chairmen who make a difference, communicating with shareholders, and why the role does not suit everyone.
AICD chief executive officer Ralph Evans says the report fills a gap identified by legal judgments in the One.Tel case, which point to a lack of guidance on the role of board chairmen.
Evans says there is confusion and misconception about the exact responsibilities a chairman should have in facilitating a well-run company and this report seeks to explain in simple terms what boards and chairmen do, and need to do, to add value to their companies.
AICD Corporate Governance Committee chairman John Ralph says the report was important in demystifying corporate boards.
He says it’s clear that chairmen and directors need to do a much better job getting their message to the public about the role of their board.
Another issue highlighted was the relationship between the Chairman and the CEO.
All chairmen interviewed said one of the most important aspects of a chairman’s performance was their relationship with management – especially the chief executive officer or equivalent.
John Ralph says there is a simple rule for communication between chairman and CEO.
He says he want the bad news by fax and good news by letter!.
He says he wants to know immediately and become part of the solution and not part of the problem. It must never be a question of winner or loser. It is the ideas that are being discussing.
The publication was written in collaboration with the AICD’s Corporate Governance Committee, which comprises some of Australia’s most senior chairmen and directors, and thinkers on corporate governance.
Copies of the publication can be obtained from the AICD on 02 8248 6600.