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Chair of the Board (COB)

Contents

  1. Understanding the Role of a Chair of the Board (COB)
  2. Key Takeaways
  3. Understanding the Chair of the Board (COB)
  4. How the Chair May Also Serve as Chief Executive
  5. Special Considerations
  6. Chair of the Board FAQs
  7. The Bottom Line

Understanding the Role of a Chair of the Board (COB)

In the corporate world, the Chair of the Board (COB) plays a pivotal role in shaping the direction and decisions of a company. Let's delve into what this position entails, its responsibilities, and its significance in corporate governance.

Key Takeaways

  • The COB holds the highest authority on the board of directors and provides leadership to the firm's officers and executives.
  • Average compensation for a COB from outside the company is $185,000, according to Salary.com.
  • The COB is elected by the board of directors and can be removed if deemed necessary.

Understanding the Chair of the Board (COB)

The Chair of the Board is more than just a title; it embodies leadership, authority, and responsibility. Elected by the board of directors, the COB acts as a liaison between the board and upper management, ensuring that the company's obligations to shareholders are met. With substantial interaction and influence over both the board and management, the COB holds a position of immense power within the organization.

How the Chair May Also Serve as Chief Executive

While the COB's primary role is to oversee the board of directors, they may also serve as the Chief Executive Officer (CEO) of the company. This dual role grants them executive authority and allows them to directly influence the company's strategic decisions. However, it can also lead to potential conflicts of interest, as the board is responsible for supervising the actions of executive officers.

Special Considerations

CEOs who ascend to the role of COB may eventually seek to separate themselves from their executive duties, focusing solely on board leadership. Additionally, in times of leadership upheaval, the COB may temporarily assume the CEO position until a suitable replacement is found.

Chair of the Board FAQs

  • How Much Does a Chair of the Board Get Paid? Board compensation varies, with outside COBs earning an average salary of $185,000 in the United States, supplemented by additional perks like stock options.
  • Are the CEO and the Chair of the Board Usually the Same Person? While some companies appoint the CEO as COB, it can create conflicts of interest due to the board's oversight role.
  • How Do You Refer to Someone Who Wins a Board Seat? Board members are typically addressed as Mr. or Mrs., followed by their board title, such as treasurer.
  • Does the Chair of the Board Influence the Stock Price? The board's decisions, including dividend policies, can impact stock prices significantly.

The Bottom Line

The Chair of the Board wields considerable influence over a company's direction and governance. With responsibilities ranging from appointing executives to shaping long-term strategies, the COB plays a vital role in the corporate landscape.