The Power of a Board Chair
New research says a board chair might be better equipped to make decisions in a crisis than a CEO. The tricky part: Avoiding a power struggle.
What can an effective board chair do for an organization? Quite a bit, some recent research suggests—especially when it comes to leading through a crisis.
In a recent Journal of Management article, three business scholars looked at how companies fared when board chairs or CEOs took the lead in response to a crisis such as COVID-19. According to a report on the research on Colorado State University’s website, when a dedicated chair “engaged in a decisive, hands-on leadership style … their companies were more likely to create streamlined, simple strategies and fared well.” However, when the company CEO also served in the board-chair position, responses tended to be more bogged down.
This predicament is less likely to apply to associations, where the CEO and board-chair roles are typically separate. But the research points to an issue with CEO responses, regardless of the organization. According to one of the researchers, Texas A&M’s Dr. Mary Waller, CEOs live with the day-to-day complexities of their organizations, which can lead them to generate overly complex solutions in a crisis.
“When we see complex crisis situations staring us in the face, our gut instinct often is to try to plan a complex response to it, with lots of contingencies,” Waller told CSU’s website. When CEOs loosen the reins and defer more to the board, she added, it “may encourage the oversight capabilities of the board that results in a simplifying of the strategy.”
Of course, it can be a challenge for CEOs and board chairs to determine who’s empowered more in which situation. CEOs have to tread carefully when participating in the board nomination process, for instance, and a lack of trust between the two leaders can undermine an effective crisis response. The data from Waller and her colleagues suggest that a process of “competitive simplification” improves an organization’s financial performance. But that can only happen if a CEO isn’t fearful that their power will be usurped.
A couple of processes can help allay those fears. One, Waller says, is to have a crisis-management plan in place, so there’s no confusion from the start about roles and responsibilities, and to get ahead of the stress and burnout that crises create. “There is absolutely no excuse for any organization not to have crisis management training throughout the layers of the organization and a continuously updated crisis management plan,” she said.
The other process is to prioritize the relationship between the CEO and board chair, preferably before the chair begins their term. In an interview I conducted last June, leadership consultant M. Louise Walters emphasized the importance of overall board orientation in generating trust and giving an organization a chance to thrive.
She especially highlighted the importance of the CEO-board chair relationship, stressing increased communication and an awareness of their particular concerns. As one CEO she surveyed explained: “The responsibility is on you to get to know your board chair, get to know their triggers, get to know their priorities, and to be able to balance making the organization successful while the chair is successful as well.”
Easier said than done, sometimes, of course. But if both the CEO and board chair share a concern for fulfilling an association’s mission, then developing some flexibility over who can lead in a crisis shouldn’t diminish anyone’s power—not when it can make the association more successful.