(a) The UK Corporate Governance Code requires that there should be a clear division of responsibilities at the head of a company between the running of the board of directors and the executive responsibility for the running of the company’s business. It also requires that the roles of chairman and chief executive should not be exercised by the same individual.
(i) Article 12 of the model articles of association for public limited companies provides for the board of directors to appoint one of their members to chair their meetings. The UK Corporate Governance Code explains that the chairman is responsible for leadership of the board and ensuring its effectiveness on all aspects of its role. The chairman is responsible for setting the board’s agenda and ensuring that adequate time is available for discussion of all agenda items, in particular strategic issues. The chairman should also promote a culture of openness and debate by facilitating the effective contribution of non-executive directors in particular and ensuring constructive relations between executive and non-executive directors.
The chairman is responsible for ensuring that the directors receive accurate, timely and clear information.
The chairman should ensure effective communication with shareholders. In relation to general meetings, although s.319 provides that any member may act as chair, this is subject to the provision of the articles and Model Article 31 states that if the directors have appointed a chairman, the chairman shall chair general meetings. The chairman conducts the meeting and must preserve order and ensure that it complies with the provisions of the companies legislation and the company’s articles. He or she is under a general duty at all times to act bona fide in the interests of the company as a whole, and thus must use his or her vote appropriately. |
