How do chairs differ from chief executive officers? It’s common to assume that the two jobs have nothing in common, but if you dig deep enough, you’ll find that there are many striking similarities between the two roles. In fact, the only difference between the two positions might be their level of responsibility! Take a look at these…and then consider what this might mean for your career aspirations!
What Is a Chair?
Board chairs are executives who serve as the presiding officer at meetings of the company’s board and have significant influence over the decisions taken by the board. As the chair, you ensure that meetings are well-run and orderly, and you work to achieve consensus in board decisions. You also make sure the board is using its skills and experience effectively.
As a chair, you must be able to listen and be diplomatic. You also need excellent leadership skills and management abilities. In addition, it’s important to understand how companies work. Because board members are appointed by other board members or shareholders, your knowledge of corporate structure will help you in keeping things running smoothly. And because company shareholders elect board members who can make decisions on their behalf, you must know how to assess which skills and experience are needed by the entire board—and find directors with those specific talents.
Understanding a Chair
A Chair is the person who presides over a meeting, whereas the CEO is the top management position in an organization. The board of directors is a group of people elected by shareholders to oversee the management of the company. The board of directors appoints the CEO, but the Chair can be either appointed by the board or elected by shareholders. The Chair is responsible for setting agendas and presiding over board meetings, while the CEO is responsible for executing the decisions of the board.
The CEO generally acts as an agent of the board, while a Chair represents shareholders. In most cases, a Chair is elected to be an independent voice who makes decisions without regard for his or her personal relationship with any members of the board. A Chair may also be elected to insulate members of a company’s upper management from liability for actions taken by that company’s board.
In order to serve as a Chair of a board, a person must be at least 18 years old, own stock in that company, and not be an employee of that company. Unlike CEO’s, a Chair is considered to be an employee of that company and can be fired if his or her relationship with shareholders deteriorates too severely. If a Chair violates his or her fiduciary duty to shareholders by being too friendly with upper management, for example, he or she may be removed from office.
Chair vs. CEO
Being the chair of a company is different than being the CEO and is either a non-executive or executive position. In some companies, the roles of CEO and chair are combined, which can make for lower transparency and accountability as it becomes harder to have checks and balances due to having one person doing two separate job functions. While the board chair has several powers to oversee company functions, the CEO’s primary responsibilities are making all the major corporate decisions ranging from everyday operation to managing company resources and to serve as the main communicator between the board of directors and other executives.
A CEO’s role changes depending on the size of the company, the culture of the company, and the industry. For example, in small companies, CEOs will take on a more hands-on role and make lower-level decisions, such as hiring and interviewing. Larger companies such as Fortune 500 companies typically employ a CEO who manages macro-level strategy and plans for growth, with tasks such as that of other executives being delegated to those. CEOs create the goals and identity of their organization and are the ones that are tasked with making those things happen. Typically, CEOs of major corporations are well known to investors, shareholders, and analysts, while chairmen or chairpersons usually remain unknown.
Examples of a Chair
JPMorgan Chase & Co. under the guidance of Jamie Dimon currently integrates both the CEO and the chair position, with Tim Cook as CEO and Arthur D. Levinson as chair. This has Apple Inc. with the distinction of splitting the two roles, with Tim Cook as CEO and Arthur D. Levinson as chair. Mr. Levinson is currently the CEO of Calico, formerly Genentech. And for Mr. Zuckerberg, there’s a social media website by the name of Facebook. On the other hand, there’s a startup Meta who, once known as Facebook, have one role for Mark Zuckerberg as Founder, Chair, and CEO of the social media giant. For example, some companies have the CEO and chairman roles as separate positions, while others combine them into one. This trend is even more common with companies led by their founders, who may also occupy more than one leadership position, such as CEO and chairman. At the same time, as the company matures, the duties may become specialized in founder-led companies if the company is performing poorly or the founder wishes to abandon the business and explore other interests.