The recent decision in the Tennis Australia TV rights case gives some helpful guidance on the role of the Board Chair. Australian Securities and Investments Commission v Mitchell (No 2) [2020] FCA 1098 (31 July 2020).
The case concerned the role of some directors of Tennis Australia in the negotiations for TV rights to tennis tournaments in Australia, “notably the Australian Open at Melbourne Park in the searing heat and brilliant sunshine of January each year.” [3]
In the course of the decision Beach J. reflects on the role of the chair of a Board.
Prefaced by the contemplative “Let me delve into the position of chairman of the board” [1398], the Judge provides a helpful list of observations which would assist any board in considering the normative (what should be) and actual responsibilities (what is required) of a chair.
I noted down 12 points that may assist in understanding the undefined role of a Chair. I think they boil down to limited additional authority but much additional responsibility.
- No power of authority to manage the Corporation
- No greater authority than an ordinary director (other than perhaps a casting vote).
- Primary function is to preside at board meetings and exercise procedural control.
- Power to set the Agenda (in consultation with CEO).
- Responsibility to ensure time for board to do its work.
- Ensure board works together and each director contributes.
- Ensure harmonious relationships between board and management.
- Find the balance between productive dissent and unproductive disruption.
- Greater responsibility for setting and implementing corporate culture.
- Greater responsibility for the corporate governance structure.
- Ensure appropriate communication with members.
- An external public relations role.
I hope that a board would include Chair responsibilities in its Board Charter so that a candidate or incumbent knows what is expected.