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Director
tools
This is part of a series of Director Tools prepared by the
Australian Institute of Company Directors. The tools
have been designed to provide our members with general
information and as a starting point for undertaking a
board-related activity. These tools are not designed to
replace legal advice or a detailed review of the subject
matter nor are they intended to cover all circumstances
where such a tool might be considered appropriate.
Position description for a
chairman
Introduction
Once the board has decided to appoint a new chairman, the next step in the recruitment process involves
developing a set of specifications for the position.
A key factor in developing the position description is to identify the specific characteristics, skills and
experience needed for the position. The process may be undertaken by the outgoing chairman, the nomination
committee or in consultation with an executive search firm.
Points to consider
• Ensure the selection process considers the key aspects of the role including establishing and maintaining an
effective working relationship with the CEO.
• Consider including an expected time commitment required by the role, including preparing for and
participating in the AGM, acting as a spokesperson for market briefings and regular meetings with the CEO
and other senior company officers.
• Legal advice should be obtained before specifying specific characteristics (for example, gender or age).
• The role requires a balance of numerous personal traits including tact, diplomacy, the ability to reconcile
opposing views and the power to influence.
© 2011 Australian Institute of Company Directors
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A sample position description for a chairman
Role:
Chairman
Reports to:
Location:
Sydney
Company overview:
(insert short description, including locations, number of customers or employees, if applicable)
Annual turnover
Other relevant company
financial information
Current board:
Chairman
Include short explanation for
the vacancy
Non-executive Directors
Executive Directors
Managing Director
(if also on the board)
CEO
(if also on the board)
• Name of current chairman
• A brief synopsis of their professional background
• Name of current non-executive directors
• A brief synopsis of their professional background
• Name of current executive directors
• A brief synopsis of their professional background
• Name of current managing director
• A brief synopsis of their professional background, details of tenure in the
role and any past role in the company
• Name of the CEO
• A brief synopsis of their professional background, details of tenure in the role and any past role in the company
The role
Company X seeks to appoint a chairman to lead its board, which is comprised of x non-executive directors
and x executive directors. This role will become vacant due to a retirement.
The role requires the time and commitment to:
• Prepare, in consultation with the CEO, the agenda for and to chair 10 board meetings a year. There may be
the need to chair monthly teleconference meetings.
• Chair all shareholder meetings, including the annual general meeting and extraordinary general meetings.
• Act as spokesperson for periodic reporting of performance and profit figures.
• Regularly review with the CEO, and other senior officers as the CEO recommends, progress on important
initiatives and significant issues facing Company X.
© 2011 Australian Institute of Company Directors
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• Chair the CEO evaluation process through the remuneration committee.
• Participate in other committee meetings as applicable.
The company’s head office is in Sydney; all meetings will be convened at this location. Additionally, some
interstate travel is anticipated.
Competencies – role related
• Knowledge of corporate governance – the ability to facilitate the governance processes and ensure
compliance with applicable laws.
• Facilitate leadership– the ability to inform and brief fellow directors on current company matters and strategies
and the ability to lead constructive and timely discussion and debate, drawing on the expertise of the board, to
review strategies.
• Business acumen - the ability to build an effective working relationship with the CEO; having a strong
understanding of the financial aspects of board responsibilities.
• Developing people – experience in developing people, evaluating performance, succession planning and
executive remuneration.
And may have specialist expertise in:
• Accounting and finance – the ability to read and comprehend the company’s accounts, financial material
presented to the board, financial reporting requirements and some understanding of corporate finance.
• Legal – the board’s responsibility involves overseeing compliance with numerous laws as well as
understanding the individual director’s legal duties and responsibilities.
• Risk management – experience in managing areas of major risk to the organisation.
• Managing people and achieving change – experience in current management thinking on employment branding,
engagement, strategic vision and stakeholder communication; knowledge of executive remuneration and compensation.
• Industry knowledge – experience in similar organisations or industries.
(The need for other skills, knowledge and experience will depend on the size and type of company, markets
operated in and line of business)
Competencies – personal
• Integrity – fulfilling a director’s duties and responsibilities, acting ethically, having appropriate independence,
putting the organisation’s interests before personal interests.
• Collaborative leader – an effective chairman needs to be able to engage in an ongoing, robust working
relationship with the CEO to ensure that the board has the necessary information it requires for effective decision
making. The chairman also needs to be able to inspire the individual contribution and participation of each board
member to fully utilise their collective expertise to set the aims, strategies and policies of the company.
• Collegial communicator – the ability to engage and communicate with all stakeholders.
• Emotional intelligence – as well as self-awareness and self-management; the chairman needs to be able to
motivate individuals and groups and be able to empathetically manage situations where strong emotions are present.
• Commercial astuteness – demonstrate good business instinct and acumen and be able to use this in a variety
of situations, including mentoring the CEO.
• An active contributor with genuine interest in the organisation and its business.
(The need for other personal competencies will be consistent with the composition of the board and its preferred
working style)
© 2011 Australian Institute of Company Directors
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Educational requirements:
(If applicable. In most instances it is assumed that an executive director has the necessary educational
qualifications to fulfil their functional role in the business.)
Tertiary
Australian Institute of Company
Directors Course
Other
Remuneration and benefits:
(If applicable. In most instances this would be nominal and, in some cases, covered by the executive
compensation associated with the executive director’s business role.)
Annual remuneration
Travel and other expenses
Other
Further reading
Further information on selecting a chairman can be found at:
Chairman of the Board: A Role in the Spotlight
Australian Institute of Company Directors (2006)
The Not-For-Profit Director 2/e
Australian Institute of Company Directors (2009)
“Selecting a New Director”
Director Q&A Company Directors website
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© 2011 Australian Institute of Company Directors
© 2011 Australian Institute of Company Directors