Chair of the Board (COB)
What Is a Chair of the Board (COB)?
A chair of the board (COB) holds the most power and authority on the board of directors and gives leadership to the company's officers and executives. The chair of the board guarantees that the company's duties to shareholders are being satisfied by going about as a connection between the board and upper management.
Figuring out the Chair of the Board (COB)
The chair of the board is voted into their position by a majority vote inside the board of directors. Since the position has substantial interaction and influence with both the board and management, the chair is seemingly the most powerful position in the company.
Habitually, yet not dependably, the chair is the member of the board with the best stake in the organization, holds a controlling interest in the organization, and holds the most democratic power of any individual. Long-term choices, like the decision about whether to seek after a merger or sale of the organization, might be determined by the board under the chair's leadership. The chair likewise has huge influence over other board choices, like arrangements of executive officers or dividend policy.
The chair of the board is otherwise called the chairperson, contingent upon the preference of the company and the individual.
How the Chair May Also Serve as Chief Executive
The chair could conceivably be engaged with the daily operation of the company, some of the time serving in a more remote advisory job yet giving ultimate oversight of the actions taken by the executives. While a president or chief executive officer (CEO) is directly engaged with planning and setting a company's strategies in motion, the chair might set objectives and objectives, with the contribution of the remainder of the board, that the executives are expected to accomplish.
Such objectives might incorporate arriving at profitability targets, expansion of market share, growth of the client base, and introducing an ideal picture for the company in the public eye.
It isn't unfathomable for the chair to all the while hold the CEO position inside an organization. This might happen in the event that the board wishes to raise the CEO to chair as an indication of confidence in their leadership, giving them direct executive authority as well as filling in as the planner for the more extensive strategies the company will seek after.
Chairman of the Board
The Chair of the Board can likewise act as Chief Executive Officer. Since part of the board's job is overseeing management, that dual job may once in a while make the presence of a conflict of interests.
Special Considerations
CEOs who become chair may ultimately try to separate themselves from their executive duties and keep a leadership position stringently with the board. A chair could likewise step into the CEO job assuming that there is a sudden purge in leadership that eliminates the current chief executive. In such examples, the chair could hold the CEO position on an interim basis until a permanent replacement is employed. The dual position could be made permanent in the event that no suitable executive can be found.
Chair of the Board FAQs
The amount Does a Chair of the Board Get Paid?
Board compensation changes widely, contingent upon the size of the company and the industry it works in. Generally speaking, board members who as of now work for the company don't receive an extra salary, while "outside" board members are compensated. The average COB salary in the United States is $185,000, as per Salary.com, which might be enhanced by stock options and other bonuses.
Are the CEO and the Chair of the Board Usually the Same Person?
In certain companies, the Chair of the Board may likewise act as Chief Executive Officer. This can in some cases make a conflict of interest since the board is responsible for managing the company's executive officers.
How Do You Refer to Someone Who Wins a Board Seat?
Generally speaking, Board members are alluded to as "Mr." or "Mrs.," trailed by their board title, for example, "financier." Collectively, they might be tended to as "members of the board."
Does the Chair of the Board Influence the Stock Price?
As well as picking the CEO and different executives, the board likewise determines the size of the company's dividends, which can sizeably affect the share price.
The Bottom Line
The chair of the board is quite possibly of the highest supervisory job in a modern corporation. As well as administering the company's long-term direction, the board is likewise responsible for delegating executives, determining their compensation, and supporting certain management choices. As a head of the board of directors, the Chair of the Board impacts these choices.
Features
- Now and again, the chair may likewise hold the title of president or chief executive officer of the company; these titles allude to executives who are commonly more associated with directly executing strategies set out by the chair and the board.
- The chair of the board (COB) heads the board of directors, gives leadership to the association's executives and different employees, drives the charge on higher perspective choices, and sets the tone for the corporate culture of the company.
- The chair takes on their job following a vote by the board of directors; correspondingly, the chair can be eliminated by the board in the event that the board concludes they are neglecting to satisfy hopes.
- The average compensation for a chair of the board from outside the company is $185,000, as indicated by Salary.com
- A board could show its faith in the CEO by raising them to chair; a chair could bounce into the CEO on an interim or permanent basis in the event that a CEO leaves or is terminated and no suitable replacement can be found.
