Chairman’s role
At Westwick Melrose & Cromwell, our Partner’s experiences as chairman across many family-controlled businesses has consistently underscored a critical need: realigning the role of the chairman with the company's bylaws. A common challenge encountered is the blurred distinction between the responsibilities of the chairman and those of the CEO.
It is essential to clarify that the chairman's role is not to run, nor to rule, the company; these responsibilities lie with the CEO. The chairman's role is distinctly defined as follows:
Running the board effectively,
Serving as the board's voice towards both the family and the CEO,
Upholding board governance.
This delineation is crucial. Like any other board member, the chairman is not directly responsible for achieving specific targets but is instrumental in setting them. The CEO, on the other hand, is tasked with implementing the strategy developed by the board and is the one who is rewarded for success and held accountable for failure.
Consequently, at Westwick Melrose & Cromwell, we adhere to a principle where the chairman is not compensated with a variable fee, nor are stocks allocated from the Management Incentive Plan. This perspective is one we firmly uphold and will continue to advocate for as long as we chair family-owned businesses.