Board Chair Definition

Any entrepreneur who runs a corporation knows that there are many teams that keep the company running. Officers, shareholders, and directors are all responsible for steering the corporation. The board of directors has the ultimate oversight of the company’s management and actions. But what role does the board chair (sometimes called the chairman of the board or chairwoman of the board) play in that oversight?

This guide reviews what a board chair is, the benefits and drawbacks of this role, and more.

What is a board chair?

Defining “board chair” is a little tricky because the role is a bit flexible. But here’s the gist: A board chair leads the board of directors, and the board is responsible for either managing or overseeing the management of a corporation. The Harvard Business Review notes that shareholders, officers, and other directors might expect a chair to: 

• Manage board meeting discussions and agendas
• Interact with the corporate management team
• Review board and corporation materials, goals, and decisions with the CEO
• Interface with the public and relevant regulatory bodies

There are many ways to be a chair of a board. Above is a loose list of expectations someone might want to keep in mind if they’re seeking to be or choose a chair for their business. 

Board Chair: The Advantages

Though a state’s corporation law might not require a corporation’s board to have a chair, running an effective board can be difficult without one. State statutes already dictate that the corporate legal entity has a hierarchy of leadership between shareholders, managers, officers, and boards. Why shouldn’t a multi-member board have its own hierarchy of management? A company’s board chair can help the corporation stay focused on its vision, keep management in line, and keep board meetings productive. 

Board Chair: The Disadvantages

Sometimes it isn’t easy to define what roles a chair should fulfill. As the Harvard Business Review points out, board chairs can hinder progress if they try to take over the CEO’s role or don’t allow other corporate agents to have proper input. When starting a corporation, it’s prudent for entrepreneurs to give themselves adequate time during the formation stage to establish an idea of how they want their board to look. State law might have minimal requirements for who can be a board member or chair, but business owners can write additional requirements in their formation documents and bylaws. 

Summary

Having a chair for a corporation’s board of directors can be important to the health of a business. But entrepreneurs want to make sure they choose the right kind of chair. If the chair doesn’t have the right kind of focus or doesn’t understand how they should lead the board and the business, their guidance could do more harm than good. 

Recommended: Do I Need an Advisory Board for My Small Business?

ZenBusiness can help

Running a corporation is full of formalities and complexities from start to finish. But it’s not a process that entrepreneurs have to navigate alone. They make starting a corporation easy with their Corporation Formation Service, and their Annual Report and Worry-Free Compliance Services can help corporations stay legally compliant over the long term, too.