Blog Post

The role of the chair and how an NED can help

Michael Strahand, Lionel Zeltser & the IDT team • 20 January 2021

Chairing a board is a bit like conducting an orchestra, creating harmony and success by the collective contribution of all. Here we share notes and tips from the collective contribution of IDT experts during a discussion on chairing board meetings.

The FRC suggests in its guidance on board effectiveness that:

‘The chair is pivotal in creating the conditions for overall board and individual director effectiveness, setting clear expectations concerning the style and tone of board discussions, ensuring the board has effective decision-making processes and applies sufficient challenge to major proposals. It is up to the chair to make certain that all directors are aware of their responsibilities and to hold meetings with the non-executive directors without the executives present in order to facilitate a full and frank airing of views.’

It also notes that the primary purpose of the guidance itself is to stimulate boards’ thinking on how they can carry out their role.

Taking on his challenge, the IDT team recently discussed the topic of the role of the chair, bringing their combined experience of individually acting as a chair in a multitude of companies and sectors, from large to small. As you would expect, the discussion was wide-ranging, so here we pick up on the 3 Ts of that discussion:


  • Timing
  • Tone
  • Talent

The aim is to share our experience, provide a few tips on best practice and conclude with some specifics on the role of the NED.

Timing

One of the roles of a chair is to ensure that there is a good workable agenda. Let’s consider other key elements of the role and consider the impact of a NED.

Keeping to that agenda is the most fundamental task of any Chairman. A good agenda has purpose and a timeline. Without control to a timeline and without direction a board meeting can ramble on for hours and achieve little. Chairing a meeting is not a popularity contest, there will be times when to meet the dual requirements of time and purpose a discussion needs to be curtailed. A good chairman will intervene politely but efficiently and suggest that the discussion is taken off-line.

Whether you are a new chair, or you are an experienced chair, there will always be the element of the iron hand in the velvet glove. You must listen, you must allow people to talk, you must stop people talking too much, you must keep the board meeting moving.


IDT tip : have a large clock visible to all board members at all times. Add timings to your agenda to indicate which agenda items are expected to have most time allotted to them.

Many different qualities will need to be displayed by the Chair – good team leadership, empathy, tact, strategic thinker, able to manage the corporate governance process, facilitator of Board debates, financial acumen, amongst others - and in particular, the Chair needs to be a perceptive reader of people.

Tone

The chairman sets the tone of the meeting from the outset. The FRC guidance notes that the role of the chair includes shaping the culture in the boardroom. Is it consultative and collegiate? Dictatorial and aggressive? Noting that different tones may be require for different meetings. The Covid pandemic has surely changed the dynamics in your board meetings.

Practically, the chair should not allow meandering and rambling. A good chair vocalises their intentions and the purpose of the meeting, they make it clear to fellow board members and attendees how they intend to manage the meeting. They publicly note that all attendees should have a voice They note that they may cut short contributions if they go off topic or are too lengthy without the ability for others to contribute.


IDT tip : As chair, have a few phrases that are natural to you that you can use to curtail excesses contributions by one individual, or topics that are overrunning their allotted time. ‘What are your thoughts?’ ‘Let’s take this topic outside of this meeting for further discussion’ ‘All good points made, does anybody have a different view.’


It is also okay for attendees to not to agree. A good chair will be aware of this and will ensure they all views are contributed to the meeting. Lively discussion through the sharing of divergent views can make the board more effective and stronger. But equally a good chair will not allow dissent with no outcome, personal comments or heightened emotions. They should be able to calm down situations, move them external to the meeting or move the topic on if no resolution is likely to be found.

Equally board members do not have to like each other, but they do have to have respect for each others opinions and contributions, especially if they are different to their own. A good chair will ensure that the breadth of opinions is shared and will not solely encourage repetition of their owns views. As the FRC states a chair should see their role as: ‘fostering relationships based on trust, mutual respect and open communication – both in and outside the boardroom – between non-executive directors and the executive team’.

A Chair needs many different qualities, and these are not all in the IQ box. A Chair needs a high level of emotional intelligence to enable them to navigate relationships, support those less confident in the meeting to contribute, quickly read the mood of the meeting, call out the elephants in the room, give the popular and unpopular feedback and be aware of the impact of decisions on those around the table.


Talent

By talent, we mean the attendees and contributors to the board meeting and the talents that they can bring to discussions and decisions.

As we’ve noted, a board meeting needs inputs and robust discussion. This can only be achieved through having a board with differing views, experience, attributes and knowledge … by default a diverse board. This diversity and difference is invaluable in the decision making of a board and setting a strategy for a company. If a board is staid, static and similar in all its components, its ability to adapt, grow, and progress will be severely hampered

Another key role of the chairman is to get these diverse board members to contribute, to get individuals to showcase their talent. The right level of engagement by the Chair will of course vary from company to company but a good chair engenders an atmosphere of openness and collaboration with the aim of moving the discussion and the company forward.


IDT tip : as chair, speak with other board members outside of the meeting schedule to understand their drivers and which topics they have most to contribute to. Agree with them before each meeting, especially in the case of new board members or those with limited board experience, that you will be calling on them to contribute on specific agenda items so that they can prepare their thoughts ahead of the meeting.


One important role of the chair, as noted by the FRC is ‘to provide guidance and mentoring to new directors as appropriate’. This can be done both within the meeting, drawing new members into discussion on those topics most relevant to them, and outside the meeting through understanding their expertise, drivers and concerns and supporting their growth within the role. A successful chair should be seen as one that nurtures a board with full contribution, that engages with all attendees, and draws out diverse contributions … not one that rules based solely on their own knowledge and experience.

As one of the IDT team noted ‘the chair needs to enable people 'to feel valued and included', it's not just about finishing on time.’


The role of the NED

What is the role of the non-executive director in relation to chairing meetings?

The NED acts as the interface between, for example, board members who do not feel they are getting their opportunity to talk and the chairman keen to get through the business at hand. The NED encourages participation both by showcasing through their own contribution, but also by nurturing and encouraging the contribution of others in support of the chair a discussion by the board in general.

An experienced non-executive director with board experience can bring good advice and help focus the board, the chairman and the chief executive officer. These skills require the NED to fully understand the culture of the company. Through a process of “Listening”, “Challenging” and “Supporting” the board, the NED can act as a bridge with the Chair to bring people together. By doing this they not only share their own expertise, but also ensure that the expertise of all other attendees is shared.

In a smaller organisation, an NED can support the chair in driving outcomes to meetings, supporting positively during meetings, leading discussions, reinforcing messaging and keeping focus on the target outcomes of each meeting. By sitting alongside a chair, they can enable a chair with such a broad range of focus areas to delegate both tangible actions and soft skills engagement. They can pick up and communicate unspoken messaging in the meeting that the chair, juggling all their roles and responsibilities, may not pick up on.

With a collaborative working relationship, the chair and a NED can create a powerful combination. A combination that can be strengthened by their combined strengths but does not detract from the ability of each to have independent views and contributions, which may also be contrary to each other. Their interaction can epitomise a collegiate working relationship with disparate views underpinned by mutual trust and respect.


Can a NED chair a meeting?

A non-executive director may be asked to chair board meetings, either as an occasional substitute or permanently appointed to the role. The suggestions around the agenda preparation, contents, roles and responsibilities still apply.

For the NED, preparation is even more important , detached from the day to day activities, they rely on board papers and communications with other board members.

If the NED is chairing a board with the CEO present, they may have a dual role. They have a responsibility to ensure the board meeting has purpose, has outcomes and actions and is finished in a timely manner, but may also act as the bridge between the CEO and other board members. A good working relationship between the NED and the CEO, both inside and outside the boardroom, is therefore highly important to enable effective board meetings.


What if you are an executive director and the chairman? IDT would recommend that in these cases the agenda is structured to allow you to effectively chair the meeting whilst also contributing. If there are agenda items at which your contribution will be necessary and important, we recommend that you appoint a vice chairman with less input into the matter to run that part of the meeting. This achieves two things. It makes it clear to the board that when you are acting as a chairman that is all you are doing. It gives chair experience to other board members and improved understanding of your role and empathy for you.


It is clear from our discussions that the right level of engagement by the Chair will vary from company to company. Many different qualities need to be exercised by the chair of a meeting and, in particular, they need to be a perceptive reader of people and circumstance. With such a broad range of qualities needed within one role, having an NED by their side is invaluable for any chair, if only to be able to share the practicalities and have a trusted confidante in the room.



If you are looking to appoint a chair to get the best out of your meetings, or are a chair yourself and would benefit from having an experienced NED by your side, contact IDT for a confidential chat at info@directorsandtrustees.co.uk

Independent Directors and Trustees is a collective of experienced UK resident directors and trustees who share their knowledge and experience amongst themselves for personal development and the benefit of the boards on which they are appointed www.independentdirectorsandtrustees.co.uk




Founders Perspective - Nigel Thornton, Agulhas Applied Knowledge

22 January 2025
Agulhas Applied Knowledge was founded in January 2003 and became employee owned in December 2020. Here Nigel Thornton , one of the 3 founder vendors, kindly shares his journey to making the decision to sell to an EOT, and beyond to its current position as an EOT, B-Corp certified company with the founders stepping back and a new leadership team in place. Why did you originally decide to sell to an EOT, and do you now believe that it was the right decision? I haven't regretted the choice to sell Agulhas to an EOT for one minute. Many years before we made the decision, we had talked to other founders of companies similar to ours, and heard how they were all struggling with the challenge of transition. I knew for a long time that we would have to come to a point where we did sell. We had three choices; the first was to wind the company down. The second was to look for a buyer, probably to a much larger company. And the third, thanks to the 2014 act, was the option to sell to the employees through the mechanism of an EOT. After living and breathing Agulhas for many years, the idea of winding down just didn't seem right, so we looked at the second two options more carefully. Once the three founders talked to others about selling out to a larger company (and we’d had some interest), or getting a venture capital injection, we realized it wasn’t an attractive option for us. We would end up doing the bidding of the buyer through the workout period, being vulnerable, really, to the new owners’ whims. A buyer would likely fire most of the staff, retaining only the seniors, and the company would be gone. From companies that had got venture capital funds we’d seen we’d be forced to grow rapidly to meet an investor’s requirements and become driven by the bottom line. In both these cases, what we'd created that was unique about Agulhas would be lost. We didn't want that to happen. So it became clear fairly quickly that the choice to sell to an EOT seemed best. It meant that the company could work effectively on the kind of things that we've always thought important. The culture of the company would be maintained. We could evolve from where we were rather than be forced to change. And actually it was better than that. It wasn’t the best worst option, quite the reverse. Soon after we made the choice to go for an EOT, and began working through what it meant, we realised that doing so was indeed consistent with our values. It was an expression of who we already were and the founders’ beliefs. And, as its worked out, I think we’ve found that for Agulhas, becoming an EOT was not as great a step as it might have been culturally, or practically. What stage is the Company at now, and what is your ongoing involvement, if any? We’re four years into our EOT life, and about halfway through the payoff of the deferred consideration. It’s gone slower that we’d hoped as our main client is the UK Government and there’s been a lot of disruption to our expected cashflow since December 2020 when we became an EOT. I've handed over being the CEO to Lauren Pett who had been our Chief Operating Officer. We did it in a very Agulhas way, evolving and having a phased process of her taking over. Since we became an EOT, the role of the staff has been strengthened through what we call the Co-Owners Forum (COF). This is still evolving, with informal and more formal working groups aligned to both areas of strategic priority for the company, and themes important to the staff. And the EOT has driven us to put in place more structured governance. We’re in the process of further developing the leadership roles in the company - what the oversight of the company board and the Trust Board means in practice - to ensure that there is a robust architecture to go forward towards and beyond Freedom Day. That’s meant a structured change to the roles that the three founders have, with us more clearly taking an oversight role through the board of Directors and the Trust Board, rather than day to day running of the company. Together with one of the other co-founders, Catherine Cameron, I’ve gone down to a four-day week. That’s for the good of us and the company, and is a deliberate internal and external signal. Beyond the CEO functions, one of the things that has enabled me to step back is the fact that we've employed people who can take on key tasks I used to do, for instance, finance and IT. I think its not unusual that if a company has grown around you, a founder ends up being a Jack or Jill of all trades. And a key thing for me is I’ve stepped out of managing our biggest client, which I’d done for over a decade. Such stepping back is the right thing to do, although doing so can be hard, it is important. When somebody asks me to do something, I’m finding myself saying, well, actually, that's not my problem anymore, go and ask so and so, it’s their job. It takes a while to get people used to that (and people still find it difficult sometimes) but, as a founder, you’ve been the last person that everybody looks to for so long it’s a hard habit for everyone to break. What have been the challenges since the transition, from your perspective as a Founder? I think when you have spent many, many years being where the buck stops, it's hard then not to think of you yourself in that role anymore. Just because it's habit, you think you are responsible for solving things because, actually, you have been responsible for solving things! You've woken up at three o'clock in the morning because it has been your responsibility to worry about whatever the company is facing, be it a cash flow issue or a delivery issue or a sticky relationship with a key client. So the first thing you've got to do is actually change where your head is at. And that's been a challenge for me. So I’ve needed to change my headspace, and also my actions. It also takes time for people to believe you when you say you aren’t going to be around forever and that you do want to step back. I think it's also a difficulty, or certainly one that I've had, which is to know when to say something and when not to say something, when to intervene and when not to intervene. You've got to let the new leadership take the decisions. And sometimes those decisions are not going to be the same as that you would have made, and sometimes there are going to be mistakes that you might see coming and you might warn people about, but actually they've got to go through and learn from the experience in the same way that I've learned over many years. And the best teacher is, in the end, experience. So it's important to calibrate when to keep your mouth shut, and crucially to be available to the new leadership if they want to ask you a question, ask what you think, to be helpful and supportive, so that they know that you have got their back if necessary. It’s delicate and I haven’t always got it right. The key issue for me is knowing that the company is safe; and that’s essentially about knowing that the beliefs, people and systems are sound, and that as far as possible there’s a secure commercial outlook. What have been the positive highlights that you can share with others? At each of the last three company away days, I've said a version of the same thing which is that 20 plus years ago, when we founded the company, if you had told me that Agulhas Applied Knowledge would have the number of staff we have, our diversity, the level of energy and interest they show in the work, and that we would have a portfolio that is as wide and interesting (and if I may say as influential) as we have, I probably wouldn't have believed you. We founded Agulhas because (apart from probably being unemployable by anyone else!) we wanted to do interesting and impactful work. We never set out as the founders to create a company that Agulhas has become. A lot of the recent change is down to the energy of our CEO, Lauren, along with the rest of our team, and the energy and creativity that being an EOT engenders. They and us have built on the foundations we created. And Agulhas has become something bigger than me or the founders; it's beyond us, and that is fantastic. The employee ownership trust creates a whole new dynamism and crystallizes the company as no longer about who we are, but about the collective energy and commitment of the entire workforce of Agulhas, our beliefs, values and its culture. And that is amazing. Truly amazing! As a Founder, and Seller, what advice would you give to leadership teams of an EO business? Firstly, don't rush. Set a clear direction, but realise the wheel can take time to turn. All the change, all the all the evolution of your company to be a fully fledged EOT is not going to happen overnight, and different parts of it will grow at different paces. There will be hiccups along the way. Which leads to the second point, its important therefore to start the process early and allow things to work through! My guess is that many founders start too late, often perhaps too close to the time when they should be moving on. Thirdly, don't be greedy. If you're greedy, if you want your payout early, if you want a lot of money, that's probably not a good thing. We had to slow down our deferred consideration repayment because our expected cashflow was heavily impacted, first by COVID and then by political machinations in the UK. We had to manage our payoff at a slower phase than we expected. I think those who look for too much money or want it too quickly run into trouble. Fourthly I think it's very important to be clear about the beliefs and values of the company; for us that was easy because our job has always been very clearly value driven. It's very important to get a sense of who you are as a company, your values, your culture, so that that can be shared amongst everybody. And if somebody comes into your company, its clear they're buying into that – and being an EOT is now who we are. Very soon after becoming an EOT we also applied for and became B-Corp certified (with a very high score I might say!). That was very good for us as the combination of both EOT and B Corp was a clear public declaration of what we stand for and communicated the identity of Agulhas internally and externally. Fifthly, get the governance right. That took us a bit, but we are well on the way. A long time ago as a young management consultant in one of the Big Four, I realised that most organisational problems boil down to two issues; role clarity and effective communication. Get those both right through the transition from a company that relies on the founders to one that is mature and no longer dependent on you, and you’ll not go far wrong. Agulhas Applied Knowledge was founded in January 2003 and became employee owned in December 2020. A research, evaluation, and consultancy specializing in international development and social policy, Agulhas is based in the UK working across the world with a variety of clients including governments, UN Agencies, NGOs, and international organizations. www.agulhas.co.uk Agulhas Applied Knowledge Trustee Limited has had an IDT independent trustee appointed to their trust board since July 2022.

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