Role models for the perfect chairman

Role models for the perfect chairman

By Stefan Stern,
Wednesday, 30th July 2014
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The BBC Trust needs to decide what kind of chairman it wants to recruit. Stefan Stern provides a survivors' guide to picking a leader it can live with

Unexpectedly, a vacancy has arisen. Major heart surgery has brought a premature close to Lord Patten’s chairmanship of the BBC Trust. The timing is unfortunate, to say the least.

The BBC has the small matter of a Scottish referendum and a finely balanced general election to get through, followed by charter renewal in 2016.

While Vice-Chairman Diane Coyle steps up on a temporary basis, a permanent answer has to be found to Lord Beaverbrook’s famous question: SWho is in charge of the clattering train?T

Given the corporation’s less than happy experience of using headhunters in 2012, when the recommended replacement for outgoing Director-­General Mark Thompson lasted all of 54 days in post, it could be that the Government will use informal networks to find a successor to Chris Patten. Several familiar names are already being mentioned in the press.

We will not add to that speculation here. But it is a good idea to ask: what sort of chairman are you looking for?

They come in a variety of shapes and sizes – horses for courses, as it were.

The ultimate choice comes down to recognising what sort of organisation you are and what state you are in. That will all go towards influencing the final decision.

So here is Television’s guide to finding the right sort of chairman.

 

The Teflon chairman

Chief executives come and go, but the Teflon chairman is for all time. You may not know his name, you may never have seen him in the papers or on television. But quietly, resolutely, he is sitting there at the head of the top table.

The shareholders trust him. The media respect him. This may be partly because he never gives any interviews and almost nothing is known about him.

In a takeover battle he is steady under fire, purposeful, solid. And successful. 

But when troubles come he is even less visible than usual. He courageously allows the CEO to front up and take the flak. If he considers it necessary, he will, with regret and after much soul-searching, throw the CEO under the next passing bus.

And, in the same breath, welcome a carefully chosen successor to the company.

It is not always obvious what the Teflon chairman is actually doing. But what little he does he achieves with minimal effort and maximum impact.

And, best of all, nothing ever sticks to him. He is sitting calmly by his phone now, waiting for the next attractive offer to come in.

 

The politico chairman

Some chairmen may not have had an active career in business. 

Their claim to fame comes from elsewhere – the rather different world of politics.

While business people often find Westminster bewildering and unsatisfactory, the traffic in the other direction flows more smoothly.

Cabinet ministers are used to pressure, media scrutiny and taking big decisions. This, in theory, makes them a natural for the boardroom.

They also bring connections and a grounded realism about the art of the possible.

In practice, however, there is a limit to how much you really want to import the trickiest moves from the politician’s playbook into a commercial enterprise.

The politico chairman can be a meddler. They may see themselves as a skilful diplomat. But they can come across as merely slippery and hard to trust.

And, as a former practising politician, they will have made enemies. They will bear grudges and may, in turn, be the object of resentment and envy.

In the right circumstances, a chairman with a black belt in the dark arts of politics may be a wise choice.

At other times, it would be precisely the opposite. A risk too far, then? You might say that. I couldn’t possibly comment.

 

The executive chairman

After enough years as a chief executive, some choose to make the step up to the job of chairman.

Corporate governance orthodoxy holds that a CEO should not become chair of the same company, but there is nothing to stop them becoming a chairman elsewhere.

This is not without risk, however. Of course, former CEOs may be decisive and forthright; natural leaders, in fact. But being a chair is a rather different role.

The CEO should be running the company. The chairman runs the board. The executive chair, on the other hand, does tend to see himself as the Man In Charge.

He may have earned his reputation for being an effective leader and businessman. 

But he should not be undermining the real CEO by intruding too far into the decision-making process.

In short, if you are going to appoint an executive chair you need a CEO with few ego problems, someone who is prepared to lean heavily on the chairman for advice, guidance and support in decision-making.

This is fine when things are going well. But when they don’t, an executive chair and CEO can expect to fall together.

 

The swaggering chairman

Some chairmen know it all. At least, they think they do. Maybe they have a lifetime of success in business behind them.

Maybe they just have the right surname, and have been groomed for success by the preceding generation from an early age.

The swaggering chair has panache, a ready wit and an eye for a headline. He might not run board meetings by the book; indeed, he may be a law unto himself.

He can be impatient, is not really a detail person, but is never dull.

In the good times the swaggering chair is a lot of fun, rarely out of the papers, spreading bonhomie.

When his luck turns, the magic dies. Look out for retribution and the blame game.

If your business is going through hard times and needs a turnaround, the swaggering chair may not be for you. Better to send for him when things are already on the up.

The swaggering chair can start a party in an empty room and give everybody an enjoyable ride – for a while. Just remember to keep an eye on the books, and to count the spoons.

 

The chairwoman

Ah, yes. I realise that the male pronoun SheT has been used throughout this piece so far. There is a reason for that.

There are precious few women chairmen – chairwomen, if you prefer – to be found in the corporate world.

This is not the place to debate why. But the lack of women chairs does point to an opportunity for the more imaginative business. Women are different. You may have noticed this.

A board led by a woman is, perhaps, going to be more open, somewhere that measured discussion can take place.

This is not automatically going to be true, as any fan of Spitting Image’s portrayal of Margaret Thatcher’s Cabinet could point out.

Nonetheless, the world is not going to end if a few more women are given opportunities in the boardroom.

Indeed, that thought might have occurred to those in charge of finding a new chair for the BBC Trust. We shall see, quite soon.

There you have it. By reading to the end you have practically saved yourself a headhunter’s fee. Good luck. And choose your chairman with care.

 

Stefan Stern writes regularly for the FT and The Guardian and is Visiting Professor of Practice at Cass Business School.

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