If you have a corporation, you know that there are many teams that keep the business running. Officers, shareholders, and directors are responsible for steering the corporation’s actions. A corporation’s board of directors has ultimate oversight of a corporation’s management and actions, but what is a board chair’s role in that oversight? For a brief review, take a look at the board chair definition below.
The board chair definition is flexible. A board chair heads the board of directors, and the board of directors 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:
There are many ways to be a chair of a board. Above is a loose list of expectations you might want to keep in mind if you’re seeking to be or choose a chair for your business.
Though your state’s corporation law might not outright require that your board have a chair, running an effective board can be difficult without one. State statutes already dictate that the corporate legal entity have a hierarchy of leadership between shareholders, managers, officers, and boards. Why shouldn’t a multi-member board have its own hierarchy of management? Your board chair can help your corporation stay focused on its vision, keep management in line, and keep board meetings productive.
Sometimes it isn’t easy to define what roles your chair should fulfill. As the Harvard Business Review points out, board chairs can hinder progress if they try to take over the CEO role or don’t allow other corporate agents to have proper input. When starting your own corporation, it’s a good idea to give yourself adequate time during the formation stage to establish an idea of how you want your board to look. Your state law might have minimal requirements for who can be a board member or chair, but you can write additional requirements in your formation documents and bylaws.
Having a chair for your corporation’s board of directors can be important to the health of your business. But you want to make sure you choose the right kind of chair. If your chair doesn’t have the right kind of focus or doesn’t understand how they should lead your board and your business, their guidance could do more harm than good.
Running a corporation is full of formalities and complexities from start to finish. But don’t worry, we can simplify the process. If you don’t have a corporation yet but you want to start one, we can make it easy with our Corporation Formation Service. Once your corporation is off the ground, our Annual Report and Worry-Free Compliance Services can help you keep your corporation legally compliant. These aren’t the only ways we can help make business ownership a snap. We have a large catalog of business support services that can help you run your business smoothly, day in and day out.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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