TA Governance Pt 2 - Chair and Chief Executive

Tags: Guidance Notes

Managing the association’s business is the responsibility of the Chief Executive in accordance with the strategy and policies approved by the governing body. The Chief Executive is responsible to the Chair for the management of the association. The Chief Executive’s strengths should be in policy formulation, representation, contacts outside the industry and management of association activities. The Chair’s primary strengths should include knowledge of the industry and credibility and contacts within the industry. What can be reasonably delegated to a Chief Executive should be, particularly in respect of outside representation.

A Chair and Chief Executive complementing each other with these skills and working well together is vitally important for a top quality association. By contrast, a Chair and Chief Executive who compete and try to undermine each other can be disastrous. Having the right people in post goes a long way towards ensuring this.

There should be a clear understanding of the respective roles. The Chair should not get involvement in management issues, particular those concerning staff issues which must be the whole responsibility of the Chief Executive. The staff should never have to be in a position where they are not clear who they are reporting to or being able to go above the Chief Executive to the Chair.

There should be open and regular lines of communication, although neither must waste the other’s time with matters that do not require their attention. The Chief Executive should be able to use the Chair as a sounding governing body to obtain constructive input since the Chair is in the best position to judge the likely reaction of the governing body.

There should also be a ‘no surprises’ approach – the Chief Executive should always give the Chair a heads up regarding possible problems and similarly, the Chair should not do anything behind the Chief Executive’s back unless, perhaps, it concerns the Chief Executive leaving the organisation.

The Role of the Chair

A good Chair is of vital importance to a trade association. A top Chair will help to give confidence to members and the governing body and leave the secretariat free to get on with the nuts and bolts of running the association. By contrast, a poor Chair can be at best a nuisance, by absorbing resources and at worst, a complete disaster. Ensuring you have a good Chair is a matter of both selection and practice.

Very few trade associations allow the members to elect the Chair, although a number of professional bodies do – often with unfortunate results. Normal practice is for the Chair to be selected from the Governing body by a nominating committee. It is often much harder to persuade the best candidate to take on the Chair rather than to identify the best candidate.

Ideally, the Chair should be a recognised industry leader and a full time Chief Executive of a leading company or an exceptionally able Chief Executive of a smaller company. The most able people will be attracted to the Chair if most of the following conditions are met:-

  • There is no formal fun-in period before taking on the Chair. Ideally, the Chair-elect should be identified around six months before the period of office begins.

  • The term of office should be one year with a maximum of two terms. A two year period of office is the norm, but flexibility should be sufficient to allow top quality candidates to serve for one year if necessary.

  • The time commitment during the period of office should be limited, ideally to Chairing meetings and leading the governing body in general, presiding over a few major functions, attending at and leading some key meetings and liaising with the Chief Executive. The average total is around two days a month.

  • The governing body comprises top quality people such that the Chairship is regarded as an honour.

  • The association is highly regarded.

Job Description

There is an increasing need for there to be a job description for the Chair. This should flesh out what is in the constitution and standing orders and should be fully documented. A sample is given below:-

Job Title:

Chair

Responsible to:

The governing body

Main purpose of job

To be responsible for leading and managing the governing body; to be the guardian of members’ interests, and to exercise the association’s responsibilities in respect of the employment of the Chief Executive.

Nature of job

The role of Chair is non-executive. The Chair needs to have an excellent working relationship with the Chief Executive who is responsible for the management of the association. The Chair and Chief Executive will agree and document a working relationship and will regularly review the operation of that relationship.

Main duties/tasks

  • To lead the governing body in exercising its responsibilities and to manage the governing body meetings and business generally efficiently and impartially.

  • To motivate the elected officers and members of the governing body.

  • To be the guardian of the interests of the members by ensuring that the association pursues its agreed objectives

  • To be responsible for all aspects of the association’s relationship with the Chief Executive, including terms and conditions of employment, and annual appraisal and salary review. In exercising this function, the Chair shall be bound by commitments made by his or her predecessors and shall, as far as possible, consult his or her predecessor, and when known, successor. The Chair shall pass over all relevant papers to his or her successor.

  • To deal with any grievances against the Chief Executive in accordance with the association’s procedures.

  • To maintain regular contact with the Chief Executive and other elected officers.

  • To preside over the AGM, any general meetings and major social functions.

  • To lead the association’s representation at meetings when required.

  • To Chair the nominations committee and to take the lead responsibility for identifying his or her successor.

Job requirements

  • Credibility in the industry and outside.

  • Leadership and Chairing skills.

  • A commitment which in normal circumstances will average two days a month.

Appointment

The Chair is elected by the governing body on the recommendation of the nominations committee and serves for a one-year term. The Chair may be elected for a second one year term.

Leading and Managing the Governing Body

The Chair’s role in leading and managing a governing body is similar as it is for any other committee. The Chair should conduct meetings fairly and efficiently and be fully familiar with the agenda and papers. The Chair may also play a major role in selecting their successor, which will require tact and diplomacy where there are candidates who will be disappointed.

The Chair may have the necessity to speak to another member of the governing body regarding his or her conduct. This may include problems with criticising staff at meetings, personal attacks on other governing body members or being rude. Where the governing body has an appraisal system, the Chair has the responsibility of conducting it. Alternatively, the Chair may need to speak with other governing bodies regarding their lack of attendance at meetings or perhaps not being sufficiently prepared for a meeting on a regular basis.

Presiding Over the AGM and Other Functions

The Chair should preside over the annual general meeting, the annual lunch or dinner and some other major social functions. Examples of these may include a dinner for MPs or a luncheon for other industry bodies. Some governing bodies may also have regular meetings with Ministers, civil servants and journalists.

When a Chair is speaking on association business the message must be the association message, written or approved by the Chief Executive. Many good Chairs will ad lib and write their own material, but they must still stick to the association’s message. A Chair must never promote their own organisation when speaking at these functions and should bend over backwards to avoid doing so.

Employing the Chief Executive

The Chief Executive will normally report to the Chair or to the whole governing body, although in practice the Chair is delegated this task, sometime with two or three other officers. The role of employer should be taken seriously to protect the association. There are two basic rules for this, the first of which is to ensure there is a full understanding of the Chief Executive’s job description, terms and conditions of employment and reporting relationships. The Chair should hold all the necessary documentation for this – contracts, salary history, arrangements for salary review and results for previous appraisals.

The second is for there to be an annual performance and salary review. This should be conducted by the Chair and possibly one other officer (the immediate past Chair or the new Chair-elect). The results should be documented in the same way as for all other staff. Some associations may choose to include an outsider in the review panel, perhaps a Chief Executive of another association.

The Role of the Chief Executive

The Chief Executive’s responsibilities should be formally recorded in the job description. The items pertaining to governance may include such items as responsibility for ensuring the constitution and complying with legislation. The Chief Executive’s contract should formally give him or her full responsibility for the management of the association, which will include all staff matters. The Chief Executive will bear the responsibility for recommendations of salary for senior management and to settle salaries for all other staff according to the budget and any necessary guidelines. The Chief Executive will, of course, have a major role in determining the aforementioned budget and guidelines.

All organisations require a disciplinary and grievance procedure. This should stop with the Chief Executive and allowing an appeal to the Chair can be asking for trouble - if the Chair overrules the Chief Executive, the latter’s credibility is seriously undermined. However, it is necessary to cover grievances against the Chief Executive and the obvious solution for this is for grievances to go straight to the Chair or to a senior member of the governing body.

The Chief Executive should take prime responsibility for the annual governance review. This should draw the governing body’s attention to areas where the constitution is being failed or where there is a danger of failure in the forseeable future. There may well be a need to make changes the light of changing circumstances. The Chief Executive should suggest where these changes are needed.

Job description

Job Title:

Chief Executive

Responsible to:

The governing body (normally with the Chair acting as representative)

Main purpose of job:

To be responsible for the development and implementation of policy issues, maintaining a high profile representative role for the industry and for the management and operation of the association.

Nature of job:

There is a need for the Chair and governing body to trust the integrity of the Chief Executive and to recognise the need for him or her to have contact with political figures and opinion formers and to speak publicly on industry issues before there has been opportunity for them to be discussed fully. The Chief Executive must recognise that he or she will always be seen as speaking for the industry and with the implied authority of the governing body. Therefore, appropriate discretion must be applied.

Main duties/tasks:

  • To lead the association, be the principal policy adviser and to be responsible for ensuring the whole of the association’s policy work is carried out efficient and effectively. This includes:-

* Monitoring of the political, economic, legislative and regulatory environment relevant to the industry;

* Developing policies and proposing policy priorities for the governing body’s consideration;

*Ensuring co-ordination and compatibility of policy work through the association.

  • To be the association’s principal spokesperson with general responsibility for the efficient exercising of the association’s representational work. This includes:-

* Ensuring that regular contact is maintained with relevant ministers, MP’s, civil servants, journalists, regulators and other opinion formers;

* Ensuring that the association’s policies and views are adequately communicated to target audiences, including appropriate media appearances and interviews and addressing relevant conferences and seminars;

* Ensuring that the association is represented in other forums as appropriate.

  • To ensure that the association provides a high quality and cost effective service to its members; to attract new members and retain the support of the existing members; to ensure the timely and efficient provision of relevant information to members; to keep members informed of the association’s activities; to maintain direct regular contact with individual members and to ensure that the various interests of members are adequately taken into consideration in the course of the association’s work.

  • To be responsible for the finances of the association, including the preparation of the annual budget, the maintenance of adequate financial controls, and the monitoring of expenditure against the budget and to make recommendations on subscription levels for the governing body’s consideration.

  • Subject to any guidelines laid down by the governing body, to be responsible for all matters pertaining to the employment of association staff.

  • To be responsible for the internal administration of the association; for ensuring that the association’s constitution is adhered to and that the association complies with all relevant legislation and regulation.

  • To be responsible for developing the forward strategy of the association.

Referenced Publications

The following publications have been utlised and referenced in the production of this guidance note:-

Trade Association Governance, by Mark Boleat

Managing Trade Associations, by Mark Boleat

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editor