“Chairman of the Board” is one of the most challenging position in corporate governance aspect.  In order to drive the organization toward its purpose, it is essential to understand the roles and duties of this particular position.  Since Chairman is the person entrusted by the Board to be its “leader” in governing the Company, the Chairman is rather influential in the decision making of the Board and the overall direction of the organization.  Therefore, guidelines developed by various agencies emphasize on the roles and responsibilities of the Chairman.

The tasks of Chairman are rather delicate and require both “science” and “art”. Therefore, a person selected by the Board to assume Chairmanship must not only demonstrate competencies but also appropriate personalities and traits such as positive attitude, leadership, intelligent, decisive, fairness, and commitment to the utmost benefit of the organization etc.

This Guideline derived from an orchestrated effort of various organizations in the Thai capital market to address the challenges associated with the crucial roles and responsibilities of the Chairman. We hope contents of this document will not only inspire and support Chairmen to perform their duties more effectively but will also be useful for all directors who need to understand and set the right expectations of the Chairman’s roles. The guideline divides into two sections including 1. Key Principles and 2. Guidelines. 

Key Principles of this guideline are as follows:

1.      The Board has legal duty to appoint a member of the Board as Chairman to act as the leader of the Board in governing the management to achieve the purpose.

2.     The Board should appoint a person fit for the Chairman position by considering the leadership, vision, useful knowledge and experiences for the business, being good role model, and able to contribute time to perform Chairman’s duties appropriately.

3.     The Board should clearly separate the roles of Chairman and CEO since the two positions have different duties and responsibilities.

4.     The Board should appoint the Chairman by taking into account the independence from the management to allow the Board to use discretion and effectively monitor the performance of management.

5.     The Board should promote check and balance mechanism between the Board and management in case the Chairman lacks independence or the Chairman and CEO positions are not clearly separated.

6.     The Chairman has legal duties to call the Board meeting, chair the meeting, and lead the discussion until the Board reached consensus.  To perform such duties, the Chairman should cover the following tasks

6.1      Set Board meeting agenda by discussing with the CEO and have measures to ensure key issues are included in the meeting agenda.

6.2      Allot sufficient time for the management to propose the agenda and for the Board to comprehensively discuss key issues.

6.3      Encourage the Board to use discretion and express opinions independently.

7.     Beside legal duties, the Board should also set roles and responsibilities of the Chairman in the following aspects:

7.1      Ensure the Board performs effectively and achieve the objectives and purpose of the organization. 

7.1.1     Encourage all directors to take parts in building ethical corporate culture and conducting business in accordance with good corporate governance principles.

7.1.2     Set clear scope of roles and responsibilities between the Board and management.

7.1.3     Set long-term goals of the organization and allocate resources, manage risks, and implement strategies to achieve those goals.

7.1.4     Set the size, composition, and structure of the Board properly with diversity.

7.1.5     Consider setting up committees to lessen burden of the Board.

7.1.6     Arrange orientation for new director and ensure continuous development of necessary knowledge and skills of directors.

7.1.7     Establish evaluation process to assess the performance of the Board, committees, individual director, and the CEO as well as support all directors to seek ways to continuously improve their performances.

7.2      Support collaboration between the Board, management, and corporate secretary to ensure smooth and effective cooperation. 

7.2.1     Work closely with the CEO and represent the Board in providing guidance and supervise the CEO. 

7.2.2     Work with corporate secretary on behalf of the Board to provide guidance and support work processes of the Board.

7.2.3     Regularly communicate and monitor the performance of the Board to strengthen positive relationship among directors.

7.3      Represent the Board in communicating key information of the organization and build positive relationship with shareholders and stakeholders.

7.3.1     Chair shareholders’ meeting (AGM) and allot sufficient time for them to ask queries. 

7.3.2     Communicate key information together with the CEO to employees, investors, media, analysts and other relevant parties.

8.     The Board should consider appropriate compensation for the Chairman. The compensation should be in alignment with roles and responsibilities, compatible with industry peers, and enough to motivate the Chairman to perform at full capacity.

9.    The Board should establish Chairman Succession plan to ensure continuity and smooth transition. 

For full "Guideline for the Chairman" please download below