Respondents of a 2021 board study by Savannah reveal how a business landscape where volatility is the norm impacts the attributes of successful chairs and boards of the future?
Agility will undoubtedly be one of the most important traits in the best chairs of the future. In a world where disruption and disruption are the business norm, nobody can know for certain what to do when faced with unprecedented circumstances, but adaptiveness and an ability to draw out and then successfully combine transferrable elements of knowledge and experience from a diverse board is an increasingly valuable attribute.
“In a challenging and increasingly virtual world, there is a real need for adaptable, agile chairs,” said one respondent of Savannah’s study, adding that chairs must move from simply “running the board” to a more “facilitative leadership style”. This calls for boards made up of individuals who have shown themselves to be resolute, calm and sympathetic in difficult scenarios, said the chair of a FTSE business services company. “Chairs should expect and embrace change as the norm.”
Breadth of experience
Robust solutions to new and unprecedented business challenges are likely to be forged from a range of different inputs. In a board context, this means chairs need to be able to extract and apply views and insights from board members who bring different knowledge, experiences and perspectives, but they must also demonstrate breadth of experience and perspective themselves. While successful chairs harness the diversity of thought around them, the ability to recognise the value of that is enhanced if they have a degree of that breadth themselves.
“The best-equipped Chairs are those who themselves have been through difficult times and been forged by crucible experiences,” said one FTSE 100 chair. Another added: “In a crisis it’s more important than ever that the Chair has been there before and can bring a sense of calm.”
In the context of today’s greatest business challenges, the best chairs will have transferable experience of innovation, transformation and change, rather than, more historically, operational or commercial effectiveness. A good chair will think widely and be inquisitive and receptive. If not in-depth knowledge, they should at least have a broad understanding of the digital world and the expectations of the ‘digital native’ generation, both as consumers and employees. As the pace of change accelerates, situational leadership becomes more important than sector experience.
Personal leadership skills
It’s one thing to assemble a varied group of non-executives with different but complementary backgrounds and experience, but truly harnessing breadth and diversity requires a leadership style that blends diplomacy and influencing skills.
Numerous survey respondents highlighted the importance of EQ (emotional intelligence), as well as other valuable personal traits such as humility, curiosity and empathy. “The best chairs are less formal and ceremonial than their predecessors,” a board director said. “There is less focus on process and supervision and more on strategy, rigour, regulation and, importantly, integrity.”
Another respondent added: “Increasingly it’s about substance not status, and being open to ideas that are unfamiliar to you. Humility and a low ego are important to genuinely inspire the rest of the board to bring you their best.”
The CEO of a construction firm said: ”People skills are often lacking in chairs, and they will need to engage to understand the evolution of their own businesses.” The chair of a listed business services company, meanwhile, said that amidst the increasing pace of change, chairs require the “emotional intelligence, empathy and courage to ensure difficult decisions are taken early”.
Culture and values
Accompanying the emphasis on EQ from a number of survey respondents were several mentions of DQ (decency quotient). A step further than EQ, DQ implies not only empathy but a genuine desire to want to achieve a more positive culture and company values. This attribute reinforces the board priority associated with company purpose and is underpinned by personality traits such as openness, integrity, courage, inclusivity, ethics and common resolve.
As the culture, values and purpose of a company become even more central to its mission and objectives, it is increasingly important that the chair reflects them. Successful chairs of the future will be more engaged with both internal and external stakeholders and viewed as embodying the values of the organisation. “They will read the winds of change,” said the CFO of a FTSE manufacturing firm, “in particular regarding changing societal expectations and the need to rely on culture in an organisation.”
The final strand of the DNA of successful chairs is the simplest yet arguably most important – they need to have the time and capacity to be able to carry out their obligations. Amidst the growing issue load facing chairs and boards, and the rise of activist investors and shareholder representatives, numerous survey respondents spoke of the increasing risks of “over boarding”, and a consequent inability to devote sufficient time and attention to the needs of each business in a portfolio of board positions.
One FTSE 100 chair said, “Over recent years the board role has doubled in complexity and scope. The number of ‘intellectual hours’ required has increased dramatically, and overboarding is going to be an even bigger issue going forward.”
The Covid-19 crisis showed very clearly that chairs can no longer assume, if they sit on three boards, that at least two of them at any one time will require much less of their attention, and that a large peak in demand for their time is only ever likely to happen one at a time. When the pandemic struck, everything peaked on every board. While a crisis as severe as a global pandemic is rare, the risk of over boarding is only going to increase. One board member said: “The chair needs the time to listen to more voices inside and outside the company and the board.”
For more information, download Savannah Group’s ‘Sequencing the DNA of the Future Chair & Board’ report here.