Board meetings, while optional for a private limited company, represent a valuable opportunity for the company’s board of directors to come together and make important decisions about the business.
As and when you do choose to hold board meetings in your company, the most critical person in the meeting will be the chairperson, also known as the ‘chair’. In this article, we look at the role of the chairperson in a board meeting and then cover the role in broader terms. Let’s get started.
The chairperson and the board meeting
The chairperson’s primary duty in a board meeting is to ensure the gathering goes smoothly.
Whilst the precise powers the chairperson does and doesn’t have can be amended in the company’s articles of association, there is a general expectation that the below are performed before, during, or after the board meeting:
1. Set the agenda
An agenda comprising ‘formalities’, ‘governance’, ‘reporting’ and ‘strategy’, alongside time allocated to each agenda item, should be distributed to the board of directors ideally two weeks before the meeting. This is to allow for changes and redistribution if necessary.
In addition, the chairperson should make sure any relevant materials for the meeting (such as financial statements and project reports) are prepared and ready for the meeting. It may be appropriate for some materials to be sent out alongside the agenda.
2. Arrive promptly
The chairperson should be the first person to arrive at the meeting on the day. We recommend arriving 20 minutes prior. This provides ample time to get everything in order, prepare all the necessary documentation, and greet attendees as they arrive.
3. Start the meeting
The chairperson should start the meeting on time. Failure to do so will set a precedent and could lead to attendees arriving late to future meetings.
4. Make introductions
It won’t always be necessary, but when new board members (or other non-board members, such as specialist advisors) are present, the chairperson should take the time to introduce all new attendees. No one in the meeting should be unknown.
5. Establish a quorum
As part of the roll call, where the chairperson checks who is in attendance, they establish whether a quorum is present. This is the minimum number of people required to validate the board meeting. In a limited company, this is two directors (provided a company operates with the Model articles of association and has more than one director).
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Furthermore, the chairperson must ascertain which directors are permitted to vote on resolutions in the board meeting. In most scenarios, all directors will be granted this right; however, there may be situations where a director can’t, because of a conflict of interest. In this situation, the chairperson must determine if a director’s vote will be invalid.
6. Work through the agenda
The chairperson should now guide the board of directors through the agenda in an orderly fashion. This typically involves dealing with unfinished business (unresolved items from the previous board meeting) and working through new business.
When discussions deviate from the agenda, the chairperson’s role is to get the conversation back on track. What’s more, if too much time is spent on a particular item, the chairperson should move the talks on (if this occurs, some items may need to be discussed again as unfinished business in the next meeting).
One of the chairperson’s most important functions is ensuring that every director entitled to speak at the meeting is given an adequate opportunity to do so. When a director has been silent, the chairperson should ask if they have anything to contribute to the topic.
7. Be impartial
A key role of the chairperson is to facilitate conversation and debate. The position should not be used to sway discussion by imposing their own opinion. Everything should be done for the betterment of the company, not any individuals within the business, including the chairperson.
The chairperson can provide their opinion and vote on resolutions like other directors. However, the platform should not be used to impose their viewpoint and steer the company’s direction.
Having said this, in some circumstances, the chairperson can be given a casting vote to settle board deadlocks. If this privilege is problematic for you, we recommend checking your company’s articles of association to see if this is in place, and then take the necessary steps to update them if required.
8. Close the meeting
Once any other business has been dealt with (such as special announcements), the chairperson should adjourn the meeting, providing the closing time and the date on when the next board meeting is due. On a less formal note, they should thank everyone for participating.
9. Approve meeting minutes
Before the meeting minutes are shared with the board of directors, they must be sent to the chairperson for approval. The chairperson’s signature validates the document and essentially proves that the board meeting took place. The minutes can then be distributed.
Regarding minutes, the chairperson should also never be the minute taker. This will distract them from their role and will likely result in a poor job on both fronts. Just like chairing a meeting is a skill, so too is minute-taking, so you must choose the right person for the job.
Is it compulsory to have a chairperson?
Simply put, no. As set out in ‘the Model articles of association for private companies limited by shares’, directors may appoint a chairperson if they wish. However, it is not obligatory.
Nonetheless, appointing a skilled chairperson will help ensure that board meetings run effectively, especially if your company has a large number of directors.
When is the chairperson named?
Unlike directors, shareholders, and people with significant control, there is no formal requirement to notify Companies House of a company’s chairperson, either at the time of registration, or afterwards. Instead, the chairperson should be appointed at the company’s first board meeting.
Typically, the chairperson will also be a director. However, unless the company’s articles of association stipulate otherwise, it’s possible to name another individual as the chairperson, such as a shareholder, company secretary (if one has been appointed) or another non-board member.
Other duties of the chairperson
Whilst effectively chairing the board meeting is a significant responsibility for the chairperson, the role is not always exclusively associated with the meeting. In more general terms, a good chairperson helps a company by:
- Leading the board of directors
- Ensuring the board always has clear and accurate information
- Helping regulate the company’s overall agenda
- Communicating clearly with shareholders
- Acting as the main representative for the company to external parties
- Promoting good corporate governance and ethical standards
Choosing your company’s chairperson
As the above suggests, careful consideration should be given to who you appoint as your company’s chairperson. It certainly shouldn’t be a throwaway decision made in the same way that you may (incorrectly) choose who will take meeting minutes.
If you are the business’ founder, taking on the job yourself may be appropriate. Alternatively, if you have a fellow founder, they might be right for the role.
Regardless of who you choose to appoint (whether this is within your current board of directors, or externally), the individual should be someone who possesses the following skills:
- Leadership
- Attentiveness
- Communication
- Organisational
- Strategic
- Decisiveness
- Resilience
- Emotional intelligence
So there you have it
That’s the role of the chairperson in a limited company’s board meeting. We hope you have found this article useful. If you have any questions, please comment and we’ll get back to you as soon as possible.
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