Chairman Position: What a Board Chair Does and When Your Company Needs One

Short answer: a chairman position (also called chair or board chair) is the role of leading a company's board of directors. The chair runs board meetings, sets the board agenda, makes sure directors get the right information, manages the board's relationship with the CEO and shareholders, and keeps the board focused on strategy, risk and oversight. The chair leads the board; the CEO leads the company.

This guide covers what a chair actually does, how the role differs from the CEO, how chairs are chosen and compensated, and when a growing or internationally expanding company should bring in an independent chair.

What does a chairman do?

The chair's job is to make the board work. In practice that usually means:

• Leading board meetings. Setting the agenda with the CEO and company secretary, chairing discussion and making sure decisions are actually reached and recorded.
• Building an effective board. Shaping board composition, leading or overseeing director appointments, onboarding new members and reviewing board performance.
• Working with the CEO. Acting as sounding board and counterweight: supporting the CEO while holding management to account on behalf of the board.
• Representing the board to shareholders. Keeping investors informed and making sure their views reach the board.
• Owning governance. Making sure the board covers strategy, risk, succession and compliance, not only the latest quarter.

The UK Corporate Governance Code, published by the Financial Reporting Council, describes the chair as responsible for the overall effectiveness of the board and for promoting a culture of openness and debate. That is a useful definition even for private companies that are not bound by the Code.

Chairman vs CEO: what is the difference?

In the UK, the Corporate Governance Code says the roles of chair and chief executive should not be exercised by the same individual, and that the chair should be independent on appointment. In the US it is more common for one person to hold both titles, often alongside a lead independent director. For startups and private companies there is no single rule, but splitting the roles becomes more valuable as the board and investor base grow. For more on board roles, see executive vs non-executive director.

Executive chair vs non-executive chair

An executive chair is involved in running the business, often a founder who has handed the CEO title to someone else. A non-executive chair is not part of management and leads the board independently. An independent chair is a non-executive chair with no material ties to the company, its management or major shareholders. Read more about the non-executive side in our guide to non-executive director (NED) roles.

How are chairs chosen?

Chairs are normally appointed by the board, and in many companies the appointment is confirmed by shareholders. In larger companies a nomination committee leads the search. Typical steps:

1. Define what the company needs from the chair over the next three to five years: a funding round, an exit, a new market, a governance upgrade.
2. Write a clear role brief covering experience, time commitment and compensation. Our guide on writing an advisor brief applies here too.
3. Search beyond the founders' own network so the shortlist includes genuinely independent candidates.
4. Interview with the CEO, key investors and existing directors, and check references.
5. Agree terms in a letter of appointment, including term length and review.

If you are on the other side and want a board role yourself, see how to become a board member.

How are chairs compensated?

A chair position is a paid role. Compensation depends on company size, stage, country and time commitment, and it usually takes one or more of these forms:

• Annual fee or retainer, typically higher than an ordinary non-executive director's fee because the role carries more responsibility and time.
• Equity, such as options or shares, which is common in startups and scaleups where cash is limited.
• A mix of both, often reviewed as the company grows.

Because ranges vary so much by market, it is best to benchmark against companies of similar size in the same country. For UK reference points, see our non-executive director pay guide, and for early-stage companies our guide to independent directors for startups.

When does a growing company need an independent chair?

Many startups run with the founder or lead investor in the chair. That works until it does not. Signs it is time for an independent chair:

• You are raising a larger round and investors expect stronger governance.
• The board has founder and investor tension and needs a neutral leader.
• A founder is stepping back from CEO and the board needs steady leadership through the transition.
• You are preparing for an exit or IPO, where an experienced chair is close to essential.
• You are expanding into new countries. A chair who has built businesses in your target markets brings judgment on regulation, partners, pricing and building a local team, and opens doors that would otherwise take years.

Finding a chair with international experience

For companies going global, the right chair is often someone who has already done it in the market you are entering. Boardio connects growth companies with 12,000+ advisors and board members in 120 countries, with 1,000+ searches done. With Boardio Turnkey, we run the search for you and you pay a one-time success fee from €1,900 + VAT only if you start working with a candidate we found. Learn more about how advisors support global expansion.

FAQ

What is a chairman position?

It is the role of leading a company's board of directors: running board meetings, shaping the board, working with the CEO and representing the board to shareholders.

Is the chairman higher than the CEO?

The chair leads the board, and the CEO reports to the board. But the chair does not manage the company day to day. The two roles have different jobs and work best as partners.

Can the CEO also be the chairman?

Legally it is often possible, and it is common in the US. The UK Corporate Governance Code recommends separating the roles, and many investors prefer a separate, independent chair.

Is a chair position paid?

Yes. Chairs are compensated with an annual fee, equity or a mix, depending on company size, stage and country.

How do I find an independent chair for my company?

Define what you need, write a clear brief and search beyond your own network. Boardio Turnkey runs the search across 12,000+ advisors in 120 countries, from €1,900 + VAT, paid only on success.