Phil Kenkel
Bill Fitzwater Cooperative Chair
Oklahoma State University
The board chair (also referred to as the chairman, chairwoman or chairperson of the board of directors) is a key leadership position. The board chair is a member of the board of directors who is elected by the board for a specified term. The bylaws of a cooperative will generally define the process for selecting the chair and the chai’s rights and duties.
The chair serves as leader and manager of the board of directors. The chair presides over board meetings, ensures that business is conducted in an orderly fashion and oversees discussion and attempts to lead the board to consensus. The board chair is also often an officer of the cooperative and signs contracts and loan agreements. The chair appoints the chairperson of committees and is usually an ex officio member of board committees. The chair also oversees the preparation of the board packet and manages the quantity, quality and timeliness of information presented to the board members. The chair is often the spokesperson for the board of directors, representing the cooperative to the members and broader public. As part of that role the board chair conducts the cooperative’s annual meeting.
The chair works closely with the chief executive officer (CEO) and is the liaison between the board and the CEO. The chair compiles issues or areas of concern from the board and communicates those needs to the CEO. The chair also conveys concerns from the CEO to the board for discussion or for formal action. The teamwork between the chair and the CEO is one of the keys to the cooperative’s success. The board chair and CEO are both leaders in the cooperative. The chair leads the board which has the responsibility to establish strategy and long-run direction. The CEO leads the employee group and has a responsibility for operations and achieving strategic objectives. The responsibilities are interrelated and require constant feedback. Business conditions and operational performance may make it necessary to modify strategic goals. The long term vision helps establish operational priorities. Teamwork between the CEO and chair is essential for both the board and the CEO to carry out their important but distinctly different responsibilities.
Characteristics of an Effective Board Chair
Not every board member has the characteristics and preparation to be an effective chair. The board chair should be a seasoned director with respected leadership and interpersonal skills. The chair should be able to direct meetings and keep directors on task. An effective board chair is results orientated but is also humble and able to encourage but not dominate discussions. The Chair must be perceived as fair and impartial. The chair should be able to define and clarify comments and convey the meaning of other directors clearly for the minutes. A good chair should also be open-minded and encourage board members to voice their views. This is critically important because the best decisions are those that are made after a free and open discussion.
The chair must be able to communicate effectively with employees, customers, suppliers and most importantly with the cooperative membership. An effective chair sets clear behavior standards and ensures that the board adheres to them by encouraging appropriate behaviors and dealing with misconduct in a strict but constructive manner. An effective chair oversees the orientation of new directors and assesses the on-going development needs of directors in order to ensure that they have the skills and knowledge to fulfill their responsibilities. An effective chair also understands the board’s composition and the perspectives of each director. The chair must be prudent in assigning directors to work together or when making committee appointments. The chair should consider the characteristics, experience and style of individual directors as well as their expertise. The chair should also be responsible for ensuring each committee has the delegated authority from the board to manage its responsibilities efficiently and effectively.
The Chair’s Role in Board Meetings
The board chair organizes and leads the board meetings. The chair works the CEO to prioritize agenda items and identify the time allotted for each. There should also be a clear mechanism for a board member to suggest an item for the agenda. Each board tends to develop their own culture for board meeting format. It is important to run the meeting efficiently and to have an established procedure in place in the event of a dispute. However, operating under the strict formality of procedural rules may be inefficient for routine actions. One of the roles of the board chair is to maintain standard board meeting procedures while also encouraging open discussion and congeniality. Most boards adopt well-known procedures such as Robert’s Rules of Order. (It should be noted that Robert’s Rule of Order for committees and boards are less restrictive and somewhat less formal than Robert’s Rules of Order for an assembly such as an annual meeting.) The board chair should be familiar with the rules and procedures for both types of meetings and enforce them fairly. Procedural decisions by the chair are rare when the board is performing well and when all board members are in agreement. Procedural decisions increase in importance when there is a controversial decision or conflict within the board or membership.
The major contribution the chairs role to the board meeting does not relate to formal motions or procedures. It is important for the board chair to understand effective methods for framing discussion, determining consensus and moving along with decisions. The chair should consider what type of discussion format is most appropriate for each agenda item. Options include an open forum or free discussion format, taking turns, brainstorming, or using formal decision tools such as pro-con charts or matrix analysis. The format by which the chair introduces each item and sets ups the dialog has significant bearings on the how the discussion unfolds. Regardless of the format, the chair should start the discussion by briefly stating the problem or decision at hand. The chair must also ensure that each board member’s views are considered and that one or two members do not dominate the discussion. The chair must also keep the discussion on track. This may require temporarily “shelving” discussion on issues which are not central to the decision at hand. In that way the chair can keep the discussion on track without devaluing the opinion or question being raised. The chair must balance the value of encouraging discussion and questions with the need to make important decisions in an appropriate time-frame. Leading the board to a decision without discouraging directors from expressing their views is the hallmark of a good chair.
Most board decisions are reached by consensus. A board chair can accomplish more by building consensus rather than pushing for motions and formal votes. A good chair often develops a sense of when the board is ready to wrap up discussion and reach a decision. At times the chair can call for a non-binding vote (straw poll) to determine if further discussion is needed. Prior to a formal vole It is often useful for the chair to summarize the general agreement. After a motion has been adopted it is helpful for the chair to remind the board of the treatment of the decision and whether the information discussed is “confidential”, restricted to internal discussion with staff or acceptable for general communication with the membership.
In cases where there is no opposition to a decision the chair can expedite the meeting by obtaining unanimous consent. This is accomplished by the chair simply stating “if there is no objection we will adopt a motion to…” When no objection is heard the chair states “since there is no objection let the minutes reflect..” The unanimous consent format save time and is appropriate for routine business or less important decisions. Parliamentary procedure is designed to protect the minority. When there is no minority (opposing) opinion to protect it is appropriate and efficient to streamline the decision process. This is part of the chair’s important responsibility to manage the time available for the board meeting. The chair should strive for sufficient time for discussion and contribution while ensuring that the entire agenda is covered. The chair should also consider the most effective order of progressing through the agenda. Most boards move through the routine decisions first and then focus on major decisions and strategic issues. However, there can be advantages in beginning with the major decisions while everyone’s energy and creativity is high.
The Chair’s Role during the Annual Meeting
The cooperative association’s annual membership meeting has a different format and purpose relative to a board meeting. The purpose of the annual meeting is for the board to report to the owners of the cooperative on the performance and status of the organization and for the membership to select board members. The members may also be asked to vote on changes to the articles of incorporation or by-laws and vote on other major decisions. The board chair is expected to manage the annual meeting and it is important that he or she be familiar with the relevant parliamentary procedures and adopts the appropriate tone to reflect the meetings importance. The cooperatives articles of incorporation or by-laws will stipulate the advance notice required for the meeting and the quorum required for legally conducting business. Typically, the agenda for the annual meeting is prepared well in advance, as are the presentations, motions, and the co-ordination of the mover and seconder. If motions/proceedings do come from the floor then the chair will usually use Robert’s Rules of Order (or other established procedure) to handle the affairs. The chair should ensure that there is some mechanism to identify individuals that are duly qualified shareholders or members, and thus able to speak, motion, vote, etc. When the agenda item of electing board members is reached the chair typically turns the meeting over to the chair of the nominating committee.
Member input at the annual meeting is important and highly desirable. Democratic control is at the heart of cooperative principles and encouraging members to participate in the annual meeting makes them more informed and involved in their governance role. Unfortunately member input can also open the meeting to members who speak to long, ramble off topic or think that the annual meeting is their forum to air complaints about everything that went wrong or was not accomplished in the preceding year. In rare cases a member actually becomes disruptive making it difficult to conduct a productive meeting. The chair should manage member input by designating specific time for member comments and questions such as during the discussion old and new business. The chair should limit comments to a set time period to keep the meeting moving along. Establishing and consistently using procedures for member input will reassure members that the process is fair and objective.
Impartiality of the Chair
According to the standard rules of parliamentary procedure the chair of a board meeting can make motions, speak on one side or the other on every motion, and vote. People often are surprised to hear this because they know some of the rules about impartiality of a chair. One point of confusion is that the chair’s voting rights and procedures for board meetings are different from that when the chair presides over membership meetings.
Although there is no universal prohibition against a chair making motions or voting during a board meeting there, are some advantages to refraining. A board chair, even with the best of intentions, may influence the outcome of a decision by expressing their personal views on the matter. The chair is often in closer contact with the CEO than others and may be also be perceived to have more information than others. The same respect that resulted in being selected for the chair in the first place may shift uncertain members of the board in the direction of the chair’s position, if that position is expressed. In determining their own voting procedures the chair should consider the custom within the particular board. If the board chair has never voted and the other directors believe the chair should not vote except to break a tie, then it is probably better to follow custom. The chair should discuss voting policy with the other board members at the beginning of his/her term so that everyone will have the same understanding of the procedures.
Stricter rules for the impartiality of the chair come in to play when the chair is presiding over a large assembly such as a membership meeting. Normally, when presiding over a large body the chair should refrain from commenting on the merits of pending questions. On rare occasions the chair may believe that a crucial factor relating to such a question has been overlooked and that their obligation as a member to call attention to the point outweighs the duty to preside at that time. In order to enter into debate, the chair must relinquish the duties of presiding to another member such as the vice-chair. The chair should not return to preside until the pending main question has been disposed of, as the impartiality of the chair has been compromised with regard to that particular issue. This procedure should be used sparingly since it may cause the members to lose confidence in the impartiality of the chair.
The Chair’s Responsibility for Board Conduct
Every cooperative board should have policies and clear expectations for board member conduct. Despite these expectations the conduct of board members can occasionally become an issue. Responding to these issues is one of least enjoyable components of the chair’s role but it is sometimes necessary and it is critical that issues be handled properly and expediently. Discipline of a Board member is not done for simple difference of opinion. Discipline is required when an individual flagrantly goes beyond their authority, breaks confidentiality, repeatedly avoids fiduciary/trustee duty and votes on personal factors rather than corporate factors, misses meetings, shows no/poor preparation for meetings, acts out publicly, and/or fails to avoid/declare conflict of interest. While it is human nature to avoid uncomfortable situations the board chair should address these issues as soon as they become evident. A good first step is to review the board’s code of conduct during the next board meeting. The chair may also want to meet with the board member informally and attempt to determine if there are underlying issues that the board member is concerned about. The chair should be direct in informing the board member that the conduct is interfering with the efficient operation of the board. In rare instances a board may be faced with removal of a difficult board member. This could be due to violation of board policy such as conflict of interest, unethical behavior or failure to attend meetings. In other cases the issues involve consistent and flagrant behavioral problems such as disrespect for other members, disrupting the meeting or otherwise interfering with the operation of the board. The process of removing a board member is usually initiated by the board chair in accordance with the procedures specified in the cooperative’s bylaws.
Accountability of the Chair
The board chair is appointed by the board of directors who must provide the authority to the chair for the fulfillment of the role. The board is also the source of authority to its only employee, the CEO, through whom authority flows throughout the organization to all staff. The board chair is the chief servant of the board and is the individual with the most accountability, not the most authority and power in the organization. Accountability is frequently misunderstood and is interpreted as liability. Accountability is more related to measuring and monitoring. A board chair demonstrates their accountability through activities such as:
- Planning the evaluation of the board’s effectiveness and implementing improvements;
- Annually reviewing progress toward the cooperative’s vision and strategic plan;
- Ensuring that board operations comply with the cooperative’s rules and policies and
- Actively soliciting input from members and other stakeholders concerning the performance of the board and the cooperative as a whole.
Selecting the Board Chair
Procedures for selecting the board chair vary widely across cooperatives. Some cooperatives select a board chair annually. Other cooperatives elect a chair for a multi-year term. Some boards have the expectation that there will be rotation for the chair position while others routinely elect a chair to consecutive terms. Cooperatives also differ in whether there is a formal or informal path to the chair position as opposed to selection from the board at large. In a minority of cooperatives the chair is elected by the membership during the annual meeting.
Regardless of the process, the most important criteria for selection is that the individual has the skills and character traits to be an effective board chair. Factors such as seniority on the board, strength of opinion at board meetings, or share of the cooperatives total stock or patronage does not imply that the individual will be an effective chair. A board member being considered for chair must also be able to effectively collaborate with the CEO. All successful cooperatives need some degree of continuity. While bringing new ideas, an incoming chair should be able to provide some context and institutional memory. Otherwise unnecessary effort is expended on procedures and activities that are inappropriate for the board or that repeat discussions or matters previously resolved by the board.
The board chair is one of the most important leadership positions in a cooperative. The chair forms a unique bridge between the CEO and the board of directors. The board chair must implement the formal procedures and informal interpersonal skills that keep the board operating effectively. An effective board that works collaboratively with the CEO is one of a cooperative’s most important assets.