Combining the roles of board chair and CEO

Combining the roles of board chairperson and chief executive can have several benefits for an organization, such as:

• Enhancing strategic alignment and vision. Having one person in charge of both the board and the executive team can ensure that the organization’s strategy and vision are consistent and coherent, and that the board and the executive team are working towards the same goals.
• Improving decision-making and accountability. Having one person responsible for both the board and the executive team can facilitate faster and more effective decision-making, as well as clearer accountability for the outcomes. The combined leader can also communicate more directly and transparently with the stakeholders, such as shareholders, employees, customers, and regulators.
• Reducing costs and complexity. Having one person hold both roles can reduce the costs and complexity of having two separate leaders, such as salaries, benefits, travel expenses, office space, etc. It can also simplify the governance structure and avoid potential conflicts or duplication of roles and responsibilities.
• Bringing better board visibility. Usually a board expects a CEO to have thought through an issue and presented the board with a solution and a recommendation before it is brought before them. On the other hand, members of the board have a duty and responsibility to keep the board informed of issues and risks as soon as they become aware of them. This means that an Executive Chair should bring issues to the board before they have been fully worked through, giving the board real time awareness of the issue and its resolution.

However, combining the roles of board chairperson and chief executive also has some drawbacks and risks, such as:

• Concentrating too much power and influence in one person. Having one person control both the board and the executive team can create a situation where there is a lack of checks and balances, independent oversight, or constructive challenge. This can lead to potential issues such as groupthink, tunnel vision, ethical lapses, or abuse of power.
• Increasing the workload and stress for the combined leader. Having one person handle both roles can create a heavy workload and stress for the combined leader, who has to balance multiple demands and expectations from different stakeholders. This can affect the leader’s performance, health, well-being, or succession planning.
• Reducing diversity and representation on the board. Having one person occupy both roles can reduce the diversity and representation on the board, especially if the combined leader is from a dominant or privileged group. This can limit the board’s ability to reflect the interests and perspectives of different stakeholders, such as minority shareholders, employees, customers, or communities.

Therefore, combining the roles of board chairperson and chief executive is not a one-size-fits-all solution for every organization. It depends on various factors such as the size, nature, culture, strategy, performance, challenges, opportunities, and stakeholder expectations of the organization. It also requires careful consideration of the potential benefits and drawbacks, as well as appropriate safeguards and mechanisms to mitigate the risks.