Director FAQ: The Role of the Executive Chair
In brief: For the purposes of this memo, NACD defines the executive chair role as a temporary position fulfilled by the former combined CEO/chair who has relinquished the CEO title while remaining board chair and onboarding an incoming CEO. Creating this role is not standard practice for a CEO transition, with only 3 percent of respondents to the 2016–2017 NACD Public Company Governance Survey using the role; however, the board may consider installing an executive chair, should the company be undergoing a period of stress or unique circumstances in which the incoming CEO needs additional guidance.
This resource can help your board to
- learn about alternative uses of the term “executive chair”;
- communicate with investors about board leadership structure; and
- create an executive chair role description.
Most relevant audiences: CEO, board chair, lead independent director, nominating and governance committee chair, corporate secretary, and general counsel