Perspectives on the decision-making style of the board chair

Abstract

Recent developments in corporate governance have put the board chair into the spotlight. The importance of positive leadership as a determinant for board effectiveness is well recognized. However, empirical research on board leadership is rather limited except for those studies that focus the attention on the benefits of combining or separating the roles of CEO and chair. This study addresses the critical issue of the pivotal role that a chairperson plays in transforming a board into an effective decision-making group. The article argues that a chairperson faces unique challenges as a leader. We then introduce the Decision-Making Grid as an analytical framework to get insights into the decision-making style of the chair. By means of a qualitative interview research technique, the study explores perspectives on board chair leadership for a sample of Belgian listed companies. The results point to three major issues. First, although the model of eye-to-eye decision making is considered to be the most effective one, board leadership is characterized by a high degree of heterogeneity in practice. Moreover, it appears to be related to the chair's personality and appeals to his personal competencies. Second, the study reveals that the chair needs to be a relational leader and that a clear delineation of his role is not an otiose luxury. Finally, the study calls for a more pluralistic theoretical lens, tapping insights from other research disciplines, to explain the nature and behaviour of board chairmanship. From our findings, we point out implications for practice. In particular, we plea for development opportunities, more attention for a well-defined selection process as well as for a periodical assessment of the board chair.