What is a chair (chairperson)?
– Definition: The chair is the director elected by a company’s board to lead meetings of the full board and its committees. The chair typically organizes meeting agendas, steers discussions, enforces meeting procedures, and works to build agreement among directors. By running the board’s deliberations, the chair can materially shape board decisions.
Key functions of the chair
– Set and circulate meeting agendas and materials so directors can prepare.
– Preside over board and committee meetings, keeping discussions on topic and orderly.
– Facilitate decision-making and seek consensus among directors.
– Help coordinate the board’s oversight of management, including CEO performance review and succession planning.
– Act as a point of contact between the board and senior executives, while normally not handling day-to-day management.
How the board of directors relates to the chair
– The board of directors is a group elected by shareholders to oversee the company’s long-term direction and major policies. Typical board duties include choosing or removing the CEO, setting executive pay, and approving major strategic moves. The chair leads that body; the board as a whole retains ultimate authority.
Chair vs. CEO — who does what?
– CEO (chief executive officer): runs the company’s operations and executes strategy. Managers report to the CEO. The CEO is appointed by the board.
– Chair: leads the board’s governance and oversight work, not daily operations.
– Relationship: the chair can influence who becomes CEO and can shape board-level oversight of the CEO. In many firms the CEO also serves on the board; in some cases the CEO and chair roles are combined in one person, which concentrates power and can reduce independent oversight. In other firms the two roles are split to strengthen supervisory checks and balances.
Types of chairs
– Non-executive (independent) chair: not employed by the company; focuses on governance and board leadership.
– Executive chair: may be a former CEO or an active executive with ongoing managerial responsibilities in addition to chair duties.
– Combined chair/CEO: one person fulfills both roles; common in founder-led companies but debated by governance experts for potential conflicts.
Examples (illustrative)
– Combined roles: Jamie Dimon at JPMorgan Chase has served as both CEO and chair.
– Separate roles: Apple’s CEO (Tim Cook) is distinct from its chair (Arthur D. Levinson).
– Founder-led combination: Some founders retain the titles of founder, chair, and CEO simultaneously (example: Mark Zuckerberg at Meta).
Title note
– “Chair,” “chairperson,” and “chairman” are all used; modern practice often favors gender-neutral titles such as “chair” or “chairperson.” High-profile leaders have set their own preferred forms of address.
Short checklist: what to look for when assessing a company’s governance around the chair
– Role separation: Are the CEO and chair roles held by one person or split?
– Independence: Is the chair an independent director (not an officer or recent executive)?
– Lead independent director: If roles are combined, is there a lead independent director with clear powers?
– Transparency: Does the company disclose the chair’s responsibilities and the board’s governance practices in its proxy statement?
– Succession planning: Is there a documented CEO succession plan overseen by the board?
– Tenure and past role: Is the chair a former CEO or founder? How long have they served as chair?
– Committee leadership: Are key board committees (audit, compensation, nomination) chaired by independent directors?
Small worked example: how a chair can sway a board vote
– Scenario: A board has 11 directors. A CEO candidate needs a simple majority (more than half) to be appointed.
– Majority required = floor(11/2) + 1 = 6 votes.
– Suppose initial votes split 5 for Candidate A and 5 for Candidate B, with one director undecided.
– If the chair actively advocates for Candidate A and persuades the undecided director, the vote becomes 6–5 and Candidate A is selected.
– Takeaway: By setting the agenda, framing the debate, and building consensus, the chair can be decisive in close board votes.
Pros and cons of combining the chair and CEO roles
– Pros: clearer single-leader accountability, faster decision-making, and potentially stronger strategic continuity (often cited in founder-led firms).
– Cons: weaker independent oversight, higher risk of conflicts of interest, and fewer internal checks on executive decision-making. Many governance advocates prefer separation or the appointment of a powerful lead independent director if roles are combined.
Practical steps for investors and students who want to evaluate a chair’s governance role
1. Read the company’s latest proxy statement (Form DEF 14A) to confirm who is chair, whether the chair is independent, and what powers are delegated to the chair or a lead director.
2. Check committee memberships and who chairs audit, compensation, and nominating committees.
3. Look for clear disclosures on succession planning and the board’s leadership structure.
4. Compare governance practices with exchange standards (e.g., NYSE/Nasdaq) and peer companies.
5. Watch for changes in leadership titles or sudden shifts in board composition—these can signal governance issues or strategic transitions.
Reputable sources for further reading
– Investopedia — “Chairman” (definition and summary): https://www.investopedia.com/terms/c/chairman.asp
– U.S. Securities and Exchange Commission (SEC) — Information on boards, proxy statements, and director duties: https://www.sec.gov
– Harvard Law School Forum on Corporate Governance — Articles on board leadership structures and best practices: https://corpgov.law.harvard.edu
– JPMorgan Chase — Leadership and governance information: https://www.jpmorganchase.com/about/leadership
– Apple — Leadership and governance page: https://www.apple.com/governance
Brief educational disclaimer
This explainer is for educational purposes only and does not constitute investment advice or a recommendation about any specific company or security. Always consult a licensed professional for personalized guidance.