.
Rapid technological change, business model disruption, COVID-19, threat of a deep recession, geopolitical uncertainty, and investor relationships demands to hold CEOs and Boards more accountable for performance all place possible strains on the Board and CEO relationship.
Chairs and CEOs have a unique relationship which should be anchored by mutual trust and respect
Whilst the Chairman and Chief Executive are collectively responsible for the leadership of the Group and for promoting the highest standards of integrity and probity, there is a clear and effective division of accountability and responsibility between the Chairman and the Chief Executive and each plays a distinctive role but complementing each other to ensure that there is a balance of power and authority and no individual has unfettered powers of decision and control.
Being an officer means a CEO shares the following legal responsibilities that directors also have:
1. a duty of care and diligence—for example, officers should prepare accurate and timely reports for the directors so that they are well informed and in a confident position to make decisions in the best interests of the corporation.
2. a duty of good faith—officers should always make decisions in the best interests of the corporation as a whole, never for their own personal advantage.
3. a duty to not improperly use position or information—officers must not misuse their position, or use information obtained as a result of their position, to gain a benefit for themselves, someone else or to cause harm to the corporation.
Chairperson
The chairman must adopt a leadership role in the conduct of the board's responsibilities and lead and manage the board in the discharge of its duties.
This role includes setting the agenda for the performance of the board's responsibilities, taking steps to ensure board meetings take place with sufficient frequency, for a sufficient length of time and with adequate information and ensuring that the board is kept properly informed of the financial position and performance of the company.
The chairman leads the board in the monitoring of management, the assessment of the company's financial position and performance and the detection and assessment of any material adverse developments.
This involves directing, if so advised by the audit committee, and requiring, the provision of material financial information to enable the board to discharge its responsibilities.
It also involves taking steps to ensure that he or she and the board are informed as to the adequacy of the cash reserves of the company, including, especially where debtors outstanding are very substantial, an analysis of debtors including an aged listing.
If the chairman has an experienced financial background, the chairman should ensure that the person appointed as finance director has appropriate qualifications, expertise and experience.
The chairman will be concerned to be personally satisfied about the accuracy of public statements made on a company's behalf, and the company's compliance with the Stock exchange Listing Rules.
Where the business of the company is being established, and expenditure exceeds and is expected to continue to exceed income, the chairman will take a close and active interest in the cash reserves of the company, including the steps that should be taken to ensure that cash reserves are maintained so as to enable the company to pay its debts as and when they fall due.
If the company is in start-up phase, the chairman should also take steps to ensure that systems are implemented to properly monitor the cash flow in and out of the company and that he or she is promptly informed of any matters materially affecting the company's cash flow.
The chairman will take steps to ensure that there is an active and functioning audit committee, among other things to assess the general standards of performance of the financial system and management..
Chief Executive Officer
Be the champion—generate enthusiasm for the mission among staff, funding bodies and other stakeholders.
Convert the vision into a step-by-step plan and secure staff and resources to carry it out.
Track progress—and income and expenditure—and provide regular reports to all the directors.
Leads the management in the day-to-day running of the Group’s business in accordance with the business plans and within the budgets approved by the Board.
Leads the management to ensure effective working relationships with the Chairman and the Board by meeting or communicating with the Chairman on a regular basis to review key developments, issues, opportunities and concerns.
Develops and proposes the Group’s strategies and policies for the Board’s consideration.
Implements, with the support of the management, the strategies and policies as approved by the Board and its committees in pursuit of the Group’s objectives.
Maintains regular dialogue with the Chairman on important and strategic issues facing the Group, and ensures bringing these issues to the Board’s attention.
Ensures that the management gives appropriate priority to providing reports to the Board which contain relevant, accurate, timely and clear information necessary for the Board to fulfill its duties.
Ensures that the Board, especially the Chairman, is alerted to forthcoming complex, contentious or sensitive issues affecting the Group.
Leads the communication programme with our stakeholders including shareholders.
Conducts the affairs of the Group in accordance with the practices and procedures adopted by the Board and promotes the highest standards of integrity, probity and corporate governance within the Group.
@ROI.Partners ®© 2023
®© ROI.Partners acknowledges the Traditional Custodians of the lands upon which our Australian teams operate. We pay our respects to ancestors and Elders, past, present and future, for they hold the memories, traditions, culture and hopes of Aboriginal and Torres Strait Islander peoples of Australia.
®© ROI.Partners acknowledges Māori as Tangata Whenua of Aotearoa and ngā iwi Māori for the land upon which our New Zealand teams operate. We recognise the Treaty of Waitangi as the founding document of New Zealand, tēnā koutou katoa.
We need your consent to load the translations
We use a third-party service to translate the website content that may collect data about your activity. Please review the details in the privacy policy and accept the service to view the translations.