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The governance triad: why board, chair and CEO alignment determines success
The Mercury
|May 20, 2025
CORPORATE governance hinges on a delicate triangle: the board, the board chairperson (chair) and the CEO. When in harmony, this dynamic provides clear roles and decisive accountability. When strained, it breeds confusion, factionalism and failure.
Good governance requires clear roles and mutual trust. The board oversees strategy; the CEO manages operations. King IV Principle 7 mandates the board to appoint the CEO, ensuring alignment with strategy and ethical culture, and guarding against external interference.
The board chair's role is pivotal in balancing support and oversight of the CEO. How the chair and CEO relate shapes the board's culture and success. If the chair and CEO are openly at odds, the board and management can splinter into camps and erode trust.
Clarity, unity and open communication define healthy governance. When present, organisations navigate challenges with accountability. When absent, chaos often follows.
FirstRand exemplifies collegial leadership and forward-looking succession planning. Long before its CEO's planned departure, the board and CEO collaborated on a multi-year plan to ensure continuity.
Alan Pullinger, the former CEO, signalled his intended time horizon early, enabling the board to anchor succession planning well in advance. Consequently, Mary Vilakazi was identified and developed as his successor.
The result: a smooth, seamless process, with Vilakazi ready to take the helm, and a leadership transition executed in a collegiate and empowering environment aligned with a consistent strategy.
This orderly handover shows how a trust-based board-CEO relationship fosters stability. The board exercised oversight in choosing the new CEO and the outgoing CEO cooperated fully with governance processes.
Markets and stakeholders responded with confidence rather than concern, precisely because the roles and plan were clear.
Denne historien er fra May 20, 2025-utgaven av The Mercury.
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