The primary responsibility of a board chair during a strategic transformation is to ensure that the board has a unified collective mind in making business judgment calls. This involves offline discussions with directors to agree on fundamental aspects such as the company’s purpose, value drivers, key stakeholders and their expectations, key risk and performance indicators, and the company culture and characteristics. The chair facilitates the development and agreement of overarching organisational goals for the transformation and ensures the board collectively buys into these goals before strategies for achieving them are implemented. The chair also plays a crucial role as a confidant to the chief executive, especially in sensitive matters, and often takes on difficult stakeholder communication responsibilities.

A unified collective mind on the board is crucial because strategic transformation requires significant and potentially disruptive changes. When the board operates with a shared understanding of the company’s direction, objectives, and the rationale behind the transformation, it can make cohesive and effective decisions. This unity provides a strong foundation for navigating challenges, gaining the necessary buy-in from the wider organisation and stakeholders, and ultimately increasing the likelihood of successful implementation. Without a unified mind, the board risks internal conflict, indecisiveness, and a lack of clear direction, which can derail even the most well-intentioned transformation efforts.

The relationship between the chair and the chief executive is critical. They typically go “offline” to collaboratively assess the current situation, define the necessary organisational goals to address challenges or opportunities, and develop a preliminary vision for the transformation. The chief executive, with their detailed operational knowledge, and the chair, with their broader governance perspective, work together to formulate a plan. This shared understanding and alignment at the top are essential before presenting the proposed transformation and organisational goals to the full board for discussion and agreement. The chair also acts as a sounding board and confidant for the CEO throughout the transformation process.

Organisational goals define the desired end state of the strategic transformation – the “what” the company aims to achieve. These goals should be clear, ambitious, and aligned with the company’s purpose and long-term sustainability. Strategies, on the other hand, outline the “how” the company will achieve these goals. They are the specific plans and actions that will be taken. The organisational goals provide the overarching direction, while the strategies are more flexible and may need to be adjusted in response to unforeseen circumstances. The chair ensures that the board keeps the organisational goals firmly in mind while being adaptable in its approach to the evolving strategies.

Significant workforce reductions are a sensitive and often necessary part of strategic transformation. The board, led by the chair, must approach this with careful consideration for the impact on employees and other stakeholders. This involves exploring alternatives, providing fair retrenchment packages, and ideally, exploring ways to mitigate the impact, such as creating new opportunities or supporting affected individuals. Transparent communication and a demonstration of empathy are crucial. The board may also need to engage with unions and local communities to explain the rationale behind the changes and to seek constructive solutions, as illustrated by the example of creating the Zenzelini business.

While boards can delegate specific tasks to committees like a strategic committee to oversee certain aspects of a transformation, the ultimate responsibility for the strategic direction and outcomes remains with the full board. The board cannot simply “rubber stamp” the recommendations of a committee. It is essential for all directors to actively engage with and interrogate the information and proposals coming from committees, apply their own independent judgment, and satisfy themselves that the proposed actions are in the best long-term interests of the company. Committees can provide valuable focus and expertise, but the final decisions and accountability rest with the entire board.

While deep industry-specific experience isn’t strictly essential, a board chair undertaking a strategic transformation must possess a strong understanding of the business and be willing to learn and familiarise themselves with the relevant industry dynamics, technologies, and key drivers. Thorough induction and open communication with experienced executives are crucial. A chair needs to be able to comprehend the core aspects of the business to effectively guide strategic discussions, challenge assumptions, and contribute meaningfully to decision-making. If a chair lacks this fundamental understanding and fails to gain it, they risk making ineffective or even detrimental decisions.

Several broader governance principles are crucial. These include recognising the company as a responsible citizen and considering the needs, interests, and expectations of all stakeholders, not just shareholders. The chair must foster a culture of fairness and transparency, ensuring that business judgment calls are made in the long-term best interest of the company, which ultimately benefits all stakeholders. This involves balancing economic, social, and environmental considerations to achieve sustainable development. The chair’s leadership should promote ethical conduct, robust internal controls, and a long-term perspective that prioritises the health and longevity of the organisation over short-term gains.