Yet, despite the significance of this role, many chairpersons are ill-equipped to perform their duties, leaving organisations vulnerable to stagnation, inefficiency, and even collapse.
A chairperson’s role is multifaceted. Beyond setting meeting agendas and presiding over discussions, they must promote an environment where diverse opinions are encouraged, and strategic decisions are made. A competent chairperson must exhibit exceptional leadership, strong communication skills, strategic acumen, and proven integrity. Their influence extends beyond the boardroom, setting the tone for the entire organisation. An excellent example of effective chairmanship can be seen in Aliko Dangote, the chairman of Dangote Group, whose clarity of vision and steady leadership have guided the company to remarkable success over decades. Yet, for every exemplary chairperson, numerous others fail to meet the required standards, jeopardising their organisations.
Incompetency among chairpersons’ manifests in various ways. One glaring symptom is a lack of strategic vision. Chairpersons who cannot align the board’s efforts with the organisation’s long-term goals leave the company directionless. Another sign is poor communication, where ineffective facilitation of meetings results in unresolved conflicts and stagnant decision-making. Some chairpersons lack adequate knowledge about the industries they oversee, making them ill-suited to address emerging challenges. Others err on extremes, either micromanaging board members and stifling innovation or neglecting their duties, leading to disengagement. For example, in some school boards, chairpersons have been found to engage in questionable ethical practices, such as secretly paying a portion of a school director’s rent without proper disclosure to the board. Such actions create conflicts of interest and erode trust within the institution, compromising the board’s integrity and oversight functions.
Another troubling symptom of incompetent board leadership is the personalisation of conflicts. Some chairpersons take personal issues against outspoken directors who challenge their decisions or advocate for transparency and accountability. Instead of encouraging healthy debate, these chairpersons’ resort to punitive measures, such as excluding dissenting voices from key discussions or undermining their authority. This behaviour stifles innovation and creates a toxic boardroom culture, discouraging directors from fulfilling their fiduciary duties. In some cases, outspoken board members have been targeted through public discreditation or exclusion from critical decision-making processes, leaving organisations vulnerable to unchecked decision-making by the chairperson and their allies.
An often overlooked yet telling sign of incompetency in board chairpersons is their inability to communicate effectively through speech. A chairperson who speaks in a very low voice, making it difficult for board members to hear and understand their points, signals deeper issues such as a lack of confidence, uncertainty in their role, and an inadequate grasp of the subject matter. Effective leadership requires the ability to command attention and inspire trust, and when a chairperson struggles to project their voice, it raises doubts about their authority and leadership presence. Speaking too softly in meetings not only hampers effective discussion but also diminishes the chairperson’s ability to control the room, address conflicts, and drive strategic initiatives. Board members may perceive such behaviour as a lack of decisiveness, which can erode trust and hinder the board’s effectiveness. This communication gap often results in board members disengaging or losing confidence in the chairperson’s leadership abilities.
The causes of such incompetency are often systemic. Many chairpersons are appointed based on connections rather than merit, undermining the selection process. Boards dominated by homogeneous perspectives suffer from groupthink, further exacerbating governance challenges. A glaring issue is the lack of training provided to new chairpersons. Unlike CEOs who undergo years of preparation, many chairpersons are thrust into their roles with little understanding of corporate governance. Conflicts of interest, where personal gain is prioritised over organisational well-being, also contribute to poor leadership. The governance failures at WeWork under Adam Neumann illustrate how personal ambitions can derail a company when the board leadership fails to intervene effectively.
The consequences of an incompetent chairperson are far-reaching. Poor leadership at the board level translates directly into declining organisational performance, as strategic missteps and poor decision-making erode profitability. Reputational damage is another inevitable outcome, as investors and the public lose faith in the organisation. Talented employees often leave companies with weak leadership, resulting in a talent drain those further hampers growth. Legal and regulatory risks also loom large when boards fail to uphold fiduciary duties, exposing organisations to lawsuits and penalties. In the case of some school boards, the lack of accountability from an incompetent chairperson has led to financial mismanagement, resignation of board members and teachers, declining student performance, and even regulatory intervention. The collapse of Lehman Brothers during the 2008 financial crisis underscores the catastrophic effects of inadequate board oversight.
Addressing this issue requires systemic reform. Stricter appointment processes should be instituted to ensure that only individuals with the necessary skills and experience are selected as chairpersons. Continuous education and training in corporate governance and leadership are essential to equip chairpersons for the complexities of their roles. Performance reviews should be conducted to hold chairpersons accountable, ensuring that they meet the expectations of their position. Diversity and inclusion on boards can bring fresh perspectives and mitigate the risk of groupthink, promoting more robust decision-making. Transparent decision-making processes, coupled with mechanisms to manage conflicts of interest, can further strengthen board effectiveness. Companies like Apple, which underwent a remarkable transformation under Steve Jobs after addressing leadership challenges, demonstrate the potential for success when strong governance is prioritised.
Furthermore, chairpersons must be reminded of their fiduciary duties to act in the best interest of the organisation rather than personal agendas. Implementing whistleblower protections for board members who report unethical behaviour can help ensure that misconduct is addressed before it leads to severe consequences. Also, regulatory bodies should take a more active role in ensuring that board chairpersons adhere to governance standards by enforcing compliance with corporate governance frameworks.
The growing influence of stakeholders in demanding accountability offers hope for the future. Shareholders, employees, and customers are increasingly recognising the importance of competent leadership and using their voices to push for change. Trends such as increased board diversity and shareholder activism are reshaping the governance landscape, emphasising the need for better leadership at the top. Ultimately, organisations that prioritise competent chairmanship not only enhance their internal governance but also build trust and credibility with their stakeholders.
To conclude, the incompetency of board chairpersons is a pressing issue that undermines organisational success and stakeholder confidence. By addressing the root causes, enforcing stricter selection criteria, and promoting transparency, organisations can nurture more effective leadership at the board level. A competent chairperson is not just a figurehead but a driving force for sustainable growth, ethical governance, and long-term success. Stakeholders must remain vigilant in demanding accountability, ensuring that organisations are led by individuals who possess the right skills, values, and vision. By embracing change and implementing the necessary reforms, organisations can cultivate a governance culture that prioritises competence, integrity, and long-term prosperity.
