Board Leadership Structures

One of the most important individuals in any corporation—large or small, for-profit or not-for-profit, public or private—is the person who leads the board. The board chair role extends significantly beyond the confines of merely running meetings (see Position Descriptions for Board Leadership Sample). It has always been a multidimensional leadership position that engages with stakeholders, shapes corporate strategy and policies, reinforces the board’s culture, and is key to driving company performance and long-term success. 

The Chair Role—A Governance Tradition 

Boards appoint chairs as a matter of tradition and common sense, not due to any formal requirement. As with any working group, directors need effective leadership to collaborate and produce effective results.

There is no legal mandate requiring a corporation to give anyone the title of board chair, per se. The titles that appear in corporation statutes are those of officers—typically (as in Title 8 of the Delaware Code), “the president, secretary, and treasurer.” The New York Stock Exchange (NYSE) and Nasdaq listing requirements do not require a board to grant a “chair” title to their leader. There is no mention of a “chair” role in the NYSE Domestic Company Corporate Governance Affirmation, which is a mandatory checklist of governance-related listing requirements; there is only a requirement to identify an independent “presiding director” to chair executive sessions. Nor do the Nasdaq listing requirements (at 5600) set forth any requirements for chairing the board. 

Despite the lack of legal or listing requirements to have a chair, however, most corporations do identify a board member with such a title. The two main types of board leadership structure are a combined CEO/chair role and separate CEO and chair roles. In recent years, the trend has shifted from mandating a particular approach, allowing boards the flexibility to determine the leadership structure based on their unique circumstances.