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Chairman of the Board

The Chairman of the board is the head of a company's board of directors..

Expanded Definition

The Chairman (or Chair) of the board's function is to ensure that the board of directors's decision making process proceeds in an orderly fashion and to help build consensus decisions within the board. As a result of their primary duty, the key asset a successful Chair must have is good people skills.

A chair is selected by his/her fellow board members for the position.

In modern times this term has been increasingly replaced by Chairperson and/or Chair to recognize the more inclusive nature of today's workplace although the term Chairman is still commonly used.

The Chairman of the board does not have to be separate individual from the CEO of the same company although the Chair's authority in most cases supersedes that of the CEO . The Sarbanes-Oxley Act strongly encourages boards to have independent directors among their membership but does not formally forbade the practice of an executive dual serving as both chair of the board and CEO . Many investors consider a CEO who dual serves as both chair and CEO to be a sign that corporate governance at the company is not sufficiently strong for investment.

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