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Role of the Chairman

Role of the Chairman

As the company's principal decision-making body, there is a danger that the Board of directors' concentration of power lead to a loss of objectivity or misuse of power by the majority on the Board.

The Chairman

The chairman of the company may be full-time or non-executive and will normally act as chairman at Board meetings (and also shareholders' general meetings).

As the chairman of meetings of shareholders and directors, he may have a second or casting vote when the voting on a resolution is evenly tied (you should check your Articles of Association). He also controls the procedure at meetings, deciding when resolutions are to be taken, and in what order, and confirms the contents of the minutes of prior Board meetings.

An experienced chairman can use these procedural powers (including the calling of a poll) to direct the course of debate and (if need be) to douse inflammatory situations. His role is generally intended to lend objectivity to decisions at directors' and shareholders' meetings.

In listed companies, splitting the roles of chairman and chief executive is widely recommended. This is primarily a measure to curb excessive power in the hands of one individual and may be considered equally appropriate in other large companies.

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