Board leadership

Virtually all large public US companies have appointed an independent director to the role of lead director, presiding director, or non-executive chairman. Regardless of title, these individuals play a key leadership role in ensuring effective, independent oversight of the company.

Much ink has been spilled debating whether boards should separate the roles of CEO and chairman and whether or not this would strengthen the board’s independence. However, the debate misses a critical point: in practice, the roles of lead director and chairman have converged in leading US companies. The lead director maintains core responsibilities, such as involvement in agenda setting, chairing executive sessions, providing feedback to the CEO after executive sessions, and helping to shape boardroom dynamics.

Lead directors are quick to point out that effective board leadership is situation-specific. However, strong board leaders are highly effective communicators who help keep board dialogue focused on the most strategic matters. They ensure that individual directors’ full expertise is brought to bear in the board’s oversight of strategy. And they ensure the board’s views are synthesized and communicated clearly to management.

Explore this issue:

Engaging with strategy after the financial crisis

Members discussed how they engage with strategy in a post-crisis, globalized business environment. The focus of their renewed strategic review is often international, where the excitement concerning impressive growth opportunities is tempered by distinctive risks. Ambassador Susan Schwab, the 15th United States Trade Representative, joined the meeting as a guest.

Learn More
The lead director’s role in major transactions

Major transactions are "bet the company" events, according to members. Lead directors discussed their responsibilities during major transactions, including serving as a conduit between management and the board, evaluating the transaction against the strategic plan, determining whether a special committee is necessary, and deciding how to communicate with outside stakeholders.

Learn More
The role and value of the lead director

The institutionalization of the lead director role has been called "the most important governance reform of recent years." Lead directors gathered to discuss the evolution and importance of their role, the challenges they face, and key issues in becoming effective board leaders.

Learn More

Related links:

Lead Director Network

Related Issues

Board and committee effectiveness

Corporate strategy

Executive compensation

Succession planning