Case-study anchor: NatWest Group plc · Coutts account closures and chief executive disclosure (July 2023).
Three things to carry forward
- The chair runs the board, not the company. When the chair starts answering questions that belong to the chief executive, the board's most important governance constraint has slipped. The seam between chair-craft and management is held by the chair, and only by the chair.
- The hardest test of chair-craft is not strategy and not oversight. It is handling a chief executive the chair has backed and who must now leave. The choreography of that moment, the public statement that lands, the timing decided in the room and not in the press, is craft. No policy does it for you.
- Boards do not fail at the boardroom table. They fail in the four corners of preparation: agenda, papers, time, and the conversation NOT held in the meeting. The chair owns all four.
A reading
Foundational normative source
- UK Corporate Governance Code (FRC, current edition). The Code sets out the chair's normative role in Principle B and the supporting provisions. Available via frc.org.uk.
- FRC Guidance on Board Effectiveness (current edition). Practical companion to the Code on chair behaviours and the chair-CEO relationship. Available via frc.org.uk.
- Cadbury Report (1992). Report of the Committee on the Financial Aspects of Corporate Governance. The foundational UK report that established the case for separating the chair and chief executive roles. Available via the National Archives.
- Higgs, D. (2003). Review of the Role and Effectiveness of Non-Executive Directors. London: Department of Trade and Industry. Develops the chair, NED, and CEO architecture that the FRC Code now codifies. Available via the National Archives.
NatWest Group · primary record
- NatWest Group plc · Regulatory News Service announcements, July 2023. The chair statement and the chief executive resignation announcement regarding the Coutts account closure episode. Available via the London Stock Exchange RNS.
- NatWest Group plc · independent review into customer treatment, commissioned July 2023. Phased reporting. Available via natwestgroup.com.
- House of Commons Treasury Select Committee correspondence with NatWest Group, 2023. Available via parliament.uk.
Critique and theory
- Tricker, B. (2019) Corporate Governance: Principles, Policies and Practices, 4th edn. Oxford: Oxford University Press. The chapter on board performance sets the structural argument for chair-CEO separation. Standard taught-programme text.
A question
What was the last hard conversation between the chair and the chief executive that did not happen in a board meeting?
If you cannot point to a specific date and a specific topic, the chair-CEO relationship is operating on letterhead, not on craft.
The wider library
This Note opens the Board Room. It works inside the chair-craft set:
- Board Room Note 02 (Committee Structures and Terms of Reference · NatWest). The chairs of board committees report to the chair of the board. The architecture of delegation is itself part of chair-craft.
- Board Room Note 05 (Board-CEO Dynamics · NatWest). The chair-CEO seam is the most consequential single relationship on the board. This Note treats the chair side; Note 05 treats the seam.
- Strategy Room Note 11 (Agency vs Stewardship · BP). The theory that decides whether the chair is the shareholders' agent monitoring the chief executive, or the board's leader stewarding the firm. Different answers, different chair-craft.
- Risk Room Note 03 (Board Risk Oversight · VW Dieselgate). The chair sets risk cadence at the board level. The Note 03 cross-link from this side is reciprocal.
The NatWest case anchors Board Room Notes 01 to 05. The Coutts and Farage episode is referenced in this Note to illustrate chair-craft under chief-executive crisis; it does not extend into the Unilever-anchored Note 06 or the jurisdiction-comparative Note 07.