The requirements and pressures of the Chairman have dramatically increased in recent years, driven by the ‘shareholder spring’ and tighter regulation.
In the past a Chairman may have only been called-upon occasionally outside of chairing Board meetings but now the role demands a much more exposure across the business – particularly in the Financial Services sector. A part time Chairman in the FTSE can expect to spend at least half of their time in the role.
This is due to a rise in the visibility and profile of the role, with shareholders being a lot more vocal about their expectations – they want a more engaged and involved Chairman. The Chairman now must understand the business in a lot more depth, in order to be able to challenge the CEO and work effectively in a tripartite relationship with the CFO.
It is no surprise then that the majority (68%) of Chairman appointments across the FTSE 100 and FTSE 250 in the last year have been internal promotions. Of the six Chairman new to their role in the FTSE 100, four of them were appointed from within. The two exceptions were Sir Roger Carr of BAE Systems, appointed in February 2014, and Stuart Chambers of ARM Holdings, appointed in March 2014, after joining the Board as Chairman designate two months previously.
Having a Chairman that has operated within the business previously means that they will already have a good understanding of the organisation and its operations, and also means that the relationship between the other Board members will have already been fostered. However, a key part of the role includes finding the balance between being involved in the business and not treading on the toes of the CEO – the roles are different.
Instead, a Chairman is there to help facilitate the right conversations at the very top of the organisation, discourage ‘group-think’ and oversee the successful succession of the CEO.
Lloyds Banking Group
Blackwell, the Chairman of the bank’s Scottish Widows arm, replaced Win Bischoff in April 2014. He has held senior positions in banking and insurance and was head of the Prime Minister’s Policy Unit in the 1990s. When searching for the Chairman, the company’s aim was to find someone with deep Financial Services experience, credibility with key stakeholders and untainted by the banking scandals.
Sir George Buckley
Buckley was lured out of a forced retirement having stepped down as Chairman & CEO of 3M, the US-based manufacturing company and Dow Jones 30 at the age of 65, to take up the role of Chairman in November 2013, replacing 66 year old Donald Brydon. Previously Chairman & CEO of Brunswick Corporation and Chief Technology Officer at Emerson Electric Company. Both a UK and US citizen, his international credentials together with the other NEDs who comprise of two UK, two US, one French and one New Zealander ensures the board at the global technology company reflects the international scope of the business.
Williamson, an accountant by background joined the board in July 2007 becoming Deputy Chairman in January 2013 and Chairman in February 2014. Previously Chief Financial Officer of International Power plc until 2012, his experience of managing relationships with the investor and financial communities balances the depth of consumer marketing experience represented on the tobacco manufacturers board.
Chambers stepped in as Chairmen designate at the semi conductor intellectual property supplier, following Sir John Buchanan’s decision to step down for medical reasons. Joining the company at the beginning of the year he took up is role in May. Chambers has experience as Chairman of Rexam plc and an NED at TESCO plc combined with his role as Group Chief Executive of Nippon Sheet Glass Group, which acquired Pilkington plc in 2006.
Sir Roger Carr
In addition to holding a variety of Chairman roles in companies such as Centrica, Cadbury, Chubb, Mitchells & Butlers and Thames Water, Carr has also served on a number of external committees. These include; the manufacturing council of the CBI, the Higgs Committee on corporate governance and business for new Europe. Carr became Chairman designate in October 2013, and succeeded Dick Olver as Chairman in February 2014 after a decade in the role where he successfully steered the company through allegations of corruption and bribery being the ire of the shareholders.