UK: leadership, governance and the company chairman

In the keynote address he delivered last month at the ICSA corporate governance conference, the FRC's chairman - Sir Christopher Hogg - reflected on the role of the board chairman within the UK's corporate governance framework (he also, as noted here, announced a review of the UK's Combined Code). With regard to board chairs, Sir Christopher observed:

The most important point about reappraising corporate governance is that Chairs should Chair. This is a crisis; little happens without leadership; and the Chair is the leader of the Board and the person who, for above all other Board members, can make or break a Board’s effectiveness ... I think it is Chairs who will determine over the long run whether the system as we now know it recovers from its battering and remains relevant and flexible".

It is difficult to disagree. The role of the chair should not be underestimated because he/she sets the tone for the way in which the board is conducted and functions. More specifically, the Combined Code provides the following supporting principle:

The chairman is responsible for leadership of the board, ensuring its effectiveness on all aspects of its role and setting its agenda. The chairman is also responsible for ensuring that the directors receive accurate, timely and clear information. The chairman should ensure effective communication with shareholders. The chairman should also facilitate the effective contribution of non-executive directors in particular and ensure constructive relations between executive and non-executive directors".