What is a 'Chairman'

A chairman is an executive elected by a company's board of directors that is responsible for presiding over board or committee meetings. The chairman ensures that meetings run smoothly and remain orderly, and works at achieving a consensus in board decisions. The position is different than that of the chief executive officer (CEO) and can be either a non-executive (part-time) or executive (full-time) position.

BREAKING DOWN 'Chairman'

In some companies, the roles of CEO and chairman are combined. This has the effect of reducing transparency and accountability due to fewer checks and balances created by having two separate positions with separate job functions.

Notable Chairmans include Ginni Rometty, Chairman, President and CEO of IBM; Ronald W. Allen, former Chairman of the Board, President and Chief Executive Officer of Aaron’s Inc. and Delta Airlines, Inc.; Indra Nooyi, chairman and chief executive officer of PepsiCo; Barry Diller, Chairman of the Board and Senior Executive of IAC/InterActiveCorp and Expedia, Inc.; Muhtar Kent, Chairman of the Board, The Coca‑Cola Company; Marillyn Hewson, Chairman, President, and CEO of Lockheed Martin; and Phebe Novakovic, Chairman and CEO of General Dynamics.

As more women take on chairman positions at leading organizations, some confusion has arisen over the correct title to use (i.e. chairwoman). Christine Lagarde, the current managing director of the International Monetary Fund (IMF) decided on the term madame chairman of the executive board for position.

Chairman Versus CEO

While the chairman of the board has several supervisory abilities, the CEO’s primary responsibilities are full time as he or she is a company’s or non-profit’s highest-ranking executive. The CEO must make all major corporate decisions, ranging from day-to-day operations to managing company resources, serving as the main point of communication between the board of directors and other executives. Still a CEO often has a position on the board.

The role of the CEO depends on the size, culture, and industry of the company. For example, in small companies, the CEO will often take on a more hands-on role, making a range of lower-level choices, such as interviewing and hiring of staff. In larger (e.g. Fortune 500) companies, the CEO typically deals with macro level strategy and direction of growth. Other tasks are delegated to other managers. CEOs set the tone and the vision for their organization, and the CEOs of major corporations sometimes rise to levels of fame. In contrast board chairmen usually remain out of the spotlight.

The board chairman is considered a peer with the other board members; together, a board can overrule the CEO's decisions.

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