The role of a company Chair – and three key characteristics for the perfect candidate

A Chair and CEO are going to spend a lot of time together making important decisions. Understanding the role, and getting the fit right, is crucial, says Christian Hamilton, Tenzing’s Co-Founder and joint Managing Partner.

Private equity is like a race against the clock, with four or five years to achieve your goal. But time goes quickly. That’s why we usually aim to bring on a Chair within the first few months of an investment. We run the selection process in partnership with our CEOs, who have the final say over who’s appointed.

The Chair, CEO, investment lead, and key senior managers should all be aware of and aligned with the investment plan and the relevant actions and goals along the way. But, put simply, a CEO is ultimately responsible for a business’s strategy and performance. And the Chair is accountable for getting the best out of that. Done right, it’s a partnership that can be productive, profitable, and enjoyable too. 

That’s why Chairs are one of the most important roles we hire for our portfolio companies.

Having welcomed a dozen new Chairs to our companies since we launched in 2015, we’ve found there are three key characteristics we look for in a standout company Chair – and what their role entails.

1. A proven business, strategy and relationship builder

An ideal Chair has already been involved with a number of businesses. These have grown through the period that the portfolio company is about to embark on. So if it’s going from 100 people, to expanding internationally and building new products, they’ve already been on that journey a number of times. 

Critically – they’ve been a CEO before. So they have a high amount of empathy for their new CEO, having walked in their shoes. They’ll have a sixth sense around what’s coming up in three or six months’ time. They can give a CEO a heads up on things to look out for. They can even demystify elements of the private equity journey.

A Chair can also help effectively consolidate and communicate the company’s strategy across a new set of stakeholders. Historically, a founder might have had a very organic strategy, which they may or may not have formally written down. But now, with investors, a management team and a board for the first time, the Chair can help get everyone together to get to the heart of the strategy in the most efficient way.

The Chair’s success is very much tied to the company’s success. They’re that trusted advisor. This can only really happen if they put a huge amount of time into understanding the business. They typically act as a Chair on no more than four businesses. That’s to be able to get as close as they need to, without ending up too stretched.

That’s why an excellent Chair is also good at building relationships across the business, giving them a fully rounded view of the company. That comes from understanding how sales, product, marketing and finance all work, as well as the individuals within those teams and their capabilities. And limitations too, to help address any performance issues.

2. Has mutual trust with the CEO

The best Chair/CEO partnerships are ones where their chemistry flows. Where a CEO can call the Chair at any time and bounce ideas and unfinished thoughts off them. A CEO might not want to reveal their innermost thoughts to a member of the management team yet. Or to the investors. So the beauty of the Chair is that they’re neither of these things. They can help guide the CEO through different stages of the business the CEO hasn’t experienced before. 

It’s like working with a good coach. Thanks to their experience, they can help a CEO diagnose whether any KPIs that are not met or problems that arise are because of an issue within the company, or if it’s due to market forces. They can work with them on a remedy. They give a CEO the confidence to make a change off the back of that. Together, they can implement a plan that the Chair and investment leads are on board with. 

A Chair should also have a contingency plan for if the CEO gets ill, or would like to move on. The CEO should be confident in the Chair’s ability to lead on this. 

3. Complements the CEO’s skillset to bring a new perspective to projects

We’re definitely not looking for a carbon copy of the current CEO’s skills and experience. Otherwise, why bother having a Chair? A background and network that complements rather than duplicates what the CEO offers accelerates everything from hiring to developing special projects.

For example, when giving general business-building advice, like around how teams are structured, or changes to compensation plans or expanding or trimming down parts of the business, that’s where it’s extremely valuable to have a complementary point of view and set of experiences and skills. If the CEO has a super strength in a particular area, you don’t need to replicate that in the Chair. 

Or when hiring for a senior role, we’d expect the Chair to be involved in all final round interviews and in the job description design on key hires, like COO, Head of Sales, and Heads of departments. Typically, on key recruiting, we would expect the Chair and the CEO to work together on job scope and to agree on who will lead which element of the process, combining their unique perspectives to help make a final decision. 

Our ideal Chair also sometimes takes on special projects for the CEO, particularly where this could be outside the CEO’s experience and comfort zone. For example, we had one instance where a CEO didn’t have experience with system changes. The Chair had done a number of Salesforce implementations, so had some trusted contacts they could bring in to lead that project. A good Chair is the type of person that acknowledges that young companies are sometimes stretched, and need people to lean in rather than just give advice.  

Offering the benefit of hindsight and wisdom

Ideally, an hour spent with the Chair could save a CEO a number of hours of trying to crack something on their own, going down blind alleys, or actually setting up projects with limited potential. We want the CEO to see the Chair as someone who saves them time thanks to the benefit of hindsight and wisdom, which can be priceless.

ABOUT THE AUTHOR

Christian Hamilton

Christian Hamilton

Christian is Co-Founder & Joint Managing Partner of Tenzing. Over the last fifteen years, he's backed many entrepreneurs and management teams, helping them grow their businesses and develop internationally. He leads on investment strategies and investor relations and is passionate about creating a culture of shared learning and continuous improvement.
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