4 October 2024
When it comes to strengthening and diversifying leadership, do you really get what you pay for, writes Paul Aristides and Helene Usherwood.
In the ever-evolving landscape of the public and not-for-profit sectors, the need for diverse leadership and robust governance structures has become increasingly apparent. The role of the Chair and specifically the relationship between the Chair and CEO can make or break an organisation.
At AQ, we hear through numerous conversations with voluntary Board members that the role of the Chair today is less geared towards the support and development of the CEO, but more towards an organisation’s outcomes and performance, often against national targets, operating within a restricted cost envelope. This is of course a natural focus, given the often highly regulated and inspected regimes that currently exist.
As a Chair, there is an expectation that an individual will come to the post with the ability to engage and inspire, demonstrating courage, tenacity, engendering trust and being curious. Skills like building relationships, having impact and influence, promoting collaboration and building team unity are also areas of focus; but across many sectors, these attributes are often underdeveloped. All of them do however matter a great deal.
We also need to ensure that the matter of diversifying leadership across the public sector is impressed upon all those involved in the recruitment of Board positions – this is not only a matter of equity and representation but is a strategic imperative.
Much has been written about the benefits of building a diverse Board, and we recognise that the public sector has made advancements in greater levels of representation across all protected characteristics, but more could undoubtedly be done. At AQ, we want to move the conversation beyond protected characteristics and areas of visible diversity; we want to see greater levels of socio-economic diversity and for organisations to really develop Boards where the intersectionality of those individuals around the boardroom table can bring insights and experiences for the benefit of the communities that they serve. However, we know that candidates for Board positions who fall into certain categories are in demand and are often ignoring the many approaches for unremunerated positions.
Benefits of paying Non-Executive positions
Over the years, a spotlight has been placed on the issue of payment and whether if Chairs, for example, were paid, the talent base for this key position would dramatically expand. By offering remuneration to the Chair role, it would make the position more attractive for a wider group of people to consider and apply for the role. Attracting a wider and more diverse audience would also then mean it becomes part of the Chair’s paid role to drive broader participation across the remaining Board volunteer base, tapping into a more diverse pool of talent as a whole.
Moreover, it could greatly strengthen the accountability relationship between the Chair and Chief Executive. Few support or development plans exist between Chairs and CEOs – coaching, mentoring, analysing the CEO’s strengths and weaknesses and putting plans in place to develop those priority areas needs to become the norm. CEOs have similar plans for their leadership teams. It seems a glaring omission if CEOs are exempted from this support structure.
Being a Chair can be time-consuming if carried out diligently and the reality is that more organisations supporting a volunteer base of boardroom members do not have the support mechanisms of other sectors. This means the one-to-one relationship become even more important.
Many CEOs may not welcome a closer relationship with their Chair, but this is a symptom of a systemic problem. The right Chair, bringing significant levels of senior leadership experience, should be a real positive in enhancing the effectiveness of the CEO and the organisation. Both are (or should be) critical leaders, and remuneration is potentially a gateway to fostering a more developed and mutually beneficial relationship.
Why have people avoided the issue of paying Chairs?
Paying Chairs is a contentious issue. Often, discussions and debates over the issue only lead to pushing it further into the long grass. Most, if not all, public sector and not for profit organisations operate on tight budgets, with resources often limited. Allocating funds to pay Chairs might divert essential financing from programmes and services. Prioritising financial resources for leadership remuneration could be seen as misaligned with an organisation’s primary objective—to deliver services and support a local community. The message of payment needs to be managed carefully and appropriately.
Of course, there is no guarantee that financial compensation will attract high-quality leaders. It may lead to individuals seeking positions solely for monetary gain rather than genuine interest in the mission of the organisation. Testing out the passion and commitment of applicants is a key part of any process but should not be sacrificed for credentials and experience.
Sometimes, where a salaried role isn’t possible, institutions explore other means to incentivise and support their Chairs and Boards, such as professional development opportunities, training programs, and mentorship. These alternatives might strengthen the leadership without necessitating financial remuneration and could promote a culture of shared commitment and development within the Board itself.
What can be said, is that over the years, and more so since the pandemic, the market for non-executives has become highly competitive. There is a growing demand for highly capable committee and Board Chairs, and there is a drive in interest from diverse communities to develop non-executive careers. Attracting the best people to voluntary Board positions is not easy, but organisations are in real need to find those talented individuals who can help it to navigate the complex challenges that lie ahead.
Ultimately, whether to pay for the Chair role comes down to the needs and resources of the individual organisation, and it is a discussion all organisations should at least have in order to make the decision that is right for them. Having been involved in these discussions previously, we are more than happy to help confidentially advise on how you might structure the decision making process and support you with the recruitment of your Board once that decision has been made. Contact Helene Usherwood or Paul Aristides.
