Chairman of the Board - Explained
What is a Chairman of the Board?
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What is a Chairman of the Board?
The Chairman of the Board of Directors (COB) is the leader of the board of directors whose role is to ensure that there is accountability among the officers and is equally accountable for the management of the officers. The chairman acts as a liaison between the top management and the board of directors, ensuring that there is compliance with the company's obligations to all stakeholders.
What does the Chairman of the Board Do?
The Chairman is usually elected by the majority vote of the board members. Since the position is considered influential by both the management and the board members, it is the strongest position in a company. Often, the chairman is always a member of the board with the most significant interest in the organization as well as possesses the highest voting rights among all stakeholders. Most often, the president of the company is always one of the members of the board. He may or may not participate in the daily organizational activities, and sometimes may take control over the actions taken by the executive body. While the CEO (or president) is involved in the planning and implementation of corporate strategies and goals, the chairman can set goals and objectives, and the board members are expected to support the ideologies of the chairman. Some of the goals that a president may propose include achieving profitable goals, increasing the company's market share, developing a customer base, and enhancing the company's image. The president of the company is always, at most times, the CEO of the company or organization. This happens when the board of directors wants to raise the level of CEO to the presidency as a reflection of trust in the presidents leadership. Executive leaders may try to interrupt their roles to maintain the strong leadership positions they hold on the board of directors. The chairman of the board may also assume the role of an executive director in case the leadership that the current CEO rejects changes suddenly. In such instances, the company's president temporarily performs the duties of the executive director until the appointment of a permanent establishment.
- Corporate Governance Law (Intro)
- What is Business Governance?
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