UK Chairmen: Untouchable?

Research by executive and non-executive recruitment specialists Directorbank has revealed what makes an outstanding director. But it also uncovers a worrying apathy among companies apparently unwilling to sack ineffective chairmen.

Surveying 430 directors, the research finds that it's personal qualities that separate the good -- who have charisma, patience, ability to listen and supportiveness from the bad -- biased, arrogant and aloof chairman who can't control their board.

Business acumen is important, too, especially when it comes to handling crises and being able to offer sound advice.

The outstanding chairmen tend to be very humble and open about their mistakes. They also recognize when things have not gone the way they'd expected and call a halt to plans.

The top five priorities for a good chairman are:

  1. Ability to run an effective board
  2. Manage relationships with shareholders and stakeholders
  3. Create value for shareholders.
  4. Experience of economic crisis
  5. Ability to motivate

"The chairmen I interviewed all had a common touch, the ability to communicate at all levels and an innate ability to make people feel comfortable with them," says Elizabeth Jackson, chief executive of Directorbank. "Of course they have a presence and command respect, but there was a great deal of modesty about them as well."

The research also identifies the 'best of the best' -- the elite of the UK's boardrooms:

  • Sir Dominic Cadbury, former chairman, Cadbury Schweppes plc
  • Jon Foulds, former chairman, Huntsworth Plc
  • Ronnie Frost, former chairman, Hays Plc
  • Ian Irvine, former chairman, Reed Elsevier Plc
  • Eric Kinder, former chairman, Smith & Nephew Plc
  • Sir Allan Leighton, chairman, Royal Mail
  • Sir Rob Margetts CBE, chairman, Legal & General Group Plc
  • Lord Marshall of Knightsbridge, former chairman, British Airways Plc
  • Sir Peter Thompson, chairman, Phoenix Asset Management

The bad news.... Almost eight out of 10 of those surveyed said they had worked with an ineffective chairman. Directors talked about the ditherer who could not communicate or listen and who failed to keep the board on course. Says one: "He was only there for the title and money....abandoned management at the first sign of trouble". And another: "Public school/Oxbridge education, totally into networking and nothing much else... Did not like to get his hands dirty".

Yet 40 per cent of the UK's boardrooms have no structure in place to remove their chairman if he is not up to scratch. and only one in five thought it was even worth training a poor performer. (And 'he' is deliberate -- while directors believe diversity is essential to the best boards, there remains a dearth of chairwomen on boards.)

Directors claim their toughest challenge is sacking their chief executive. So it's wrong that the chief executive can be sacked yet the chairman remains untouchable. Says Jackson: "Companies need to have everyone pulling their weight, not just on the factory floor or in the office but also in the boardroom. No-one should be immune."

But quis custodiet ipsos custodes -- who guards the guards?