Selecting the chair of the board is an extremely important duty of the board. It can mean the difference between a smooth and effective board and a dysfunctional one.
During my Hershey career, I have experienced both.
At the Hershey Trust, when we had a very good chair, board meetings were held to the time allotted, board agendas were not strayed far from the plan and board members, although at times disagreeing on issues, walked away from the meetings peaceful and satisfied. The agendas were prepared between the chair and the CEO and the chair made sure that every board member was heard.
When we had poor board chairs, the opposite occurred. Board members left meetings angry and frustrated, meeting length always ran over causing some members to leave early, and the topics discussed were all over the place; in fact, sometimes the CEO was so frustrated that certain topics were not resolved.
When considering board members to be elected chair, I looked for 2 things:
- The candidate should have run something at least equal to the complexity of the organization the board is running. Essentially, if this is a board for a $10 million company, the chair should have been responsible for such an enterprise at some point in their career, whether they were a CEO or a vice president in charge of such a division. Now, in the case of the Hershey Trust, we didn’t have anyone on the board who had run a $10 billion trust, but we did have people on the board who ran substantial enterprises in their own right.
- Another attribute to look for in a chair has more to do with personality. Is this candidate combative in nature or stuck on their views? I wanted a person that tries to find consensus in issues that arise. Are they willing to create an open dialogue and debate among board members on difficult subjects? In Hershey we had both at differing times.
In the 1990s, Fortune magazine named the Hershey Trust board one of the worst boards in corporate America. Our board chair at that time did not fit either of these two attributes.
Enough said.