Boards are often described as being stewards of corporate assets. In practice, they do something rather more consequential: they decide what success actually looks like.

This responsibility sits squarely with the chair. But there’s a catch in terms of how much influence a chair really has. Ultimately, this depends less on their personal capability than on the institutional system they operate within.

Two levers define this influence. First is the latitude of actions, or range of strategic moves available to the board. The second is the latitude of objectives, essentially the range of goals the board can legitimately pursue.

Most governance debates focus on the former. For chairs, it’s the latter that matters the most.

In simple terms, executives deliver performance. Boards decide what performance means. And the chair, more than anyone, shapes that definition.

Latitude of objectives: The real power lever

Market conditions, industry dynamics and capability shape what a company can do. Institutions, along with their laws, norms, and governance codes, shape what it is allowed to be prioritised.

This distinction is critical because, where the latitude of objectives is narrow, boards are effectively told what to optimise for, most typically in the form of shareholder returns.

Where it’s broad, boards have to actively choose between competing priorities, ranging from profit, people, sustainability, resilience, or national interest.

This is also where chairs can really earn their keep. They influence executive pay, CEO selection, and strategic oversight, but their most consequential role is framing the organisation’s purpose and priorities.

That framing determines not just strategy, but ultimately performance itself. However, chairs don’t operate on a level playing field globally.

Anglo-American markets: discipline with limits

In the US, UK and Australia, the rules of the game are clear, even when they’re not written into statute. Shareholder value dominates.

Legal expectations, investor pressure and market norms all reinforce a single overriding objective: maximise returns.

For chairs, this creates clarity, but also constraint. There is limited room to redefine success in broader stakeholder terms. Environmental or social goals are typically justified through the lens of long-term shareholder value. Even when boards talk about purpose, this underlying metric rarely shifts.

There are exceptions. Founder-led firms or those with concentrated ownership can stretch the definition of value. But even here, alternative priorities tend to be reframed as those serving shareholders over time.

The result is a relatively narrow playing field. Chairs can influence how value is delivered, but are far less able to change what kind of value counts.

Japan and Germany: where structure shapes behaviour

In Japan the constraints look very different, but are no less powerful.

Here, corporate objectives are shaped by deeply embedded relationships between companies and banks, suppliers, employees and other long-standing partners. Governance is less about formal independence and more about loyalty and continuity.

Decision-making is consensual, cautious and collective. Chairs operate within a system that prioritises stability over disruption.

While this model has strengths, including resilience, long-term orientation and strong stakeholder alignment, it can also limit strategic agility. The chair’s role is one of balancing and preserving relationships, rather than redefining corporate direction.

Germany offers a striking contrast. Its two-tier board system, management and supervisory, formally embeds a broader set of stakeholders into governance. Employee representation is not optional, it’s mandated. And this changes everything.

Chairs of supervisory boards must navigate competing interests, ranging from shareholders and employees, through to communities and the state. Workplace conditions, environmental standards and social responsibility are a part of the core agenda.

This expands the latitude of objectives significantly.

But it also raises the bar. Chairs have to reconcile tensions, broker compromises and lead in a far more complex decision environment. Done well, this can strengthen long-term performance. Done poorly, it can slow decision-making.

China: power without constraint

China presents perhaps the most intriguing case.

On paper, its many governance structures resemble Anglo-American models, independent directors, formal boards, oversight frameworks. In reality, the system operates very differently.

Enforcement is uneven, legal recourse is limited and informal relationships and political considerations often outweigh formal rules.

Culturally, hierarchy is deeply respected. Chairs, frequently founders or dominant shareholders, command significant authority and dissent in the boardroom is rare. The result? Extraordinary discretion.

Chinese chairs can set objectives that extend well beyond shareholder returns, whether these are driven by long-term ambition, state priorities or through personal vision. That freedom can enable bold, strategic moves at speed.

But it also introduces risk. Without strong checks and balances, outcomes depend heavily on the judgement, and integrity, of the individual chair.

What this means for today’s boards

Across all markets, one principle holds steady: Executives execute, while boards define direction.

But how far a board, and its chair, can shape that direction is determined by institutional context.

In shareholder-centric systems, the chair’s role is focused and disciplined, but bounded. In stakeholder-oriented systems like Germany, the role expands into balancing, competing priorities. In relationship-driven systems like Japan, it becomes one of stewardship and continuity. And in environments like China, it can become highly personalised and powerful.

For today’s chairs and aspiring board leaders, this has three implications. First, context matters more than capability. The same leadership style will not translate across jurisdictions.

Second, defining purpose is the central act of governance. Strategy follows from it.

And third, the chair’s real influence lies not in controlling management, but in shaping the goals management is asked to pursue.

As stakeholder expectations rise and geopolitical pressures intensify, this responsibility is only becoming more complex.

The question for every chair is no longer just “are we delivering?” It has become “delivering what, and for whom?”

Andrew Kakabadse (1948-2025) was professor of governance and leadership at Henley Business School and a lynchpin figure in UK and global corporate governance. Nada Kakabadse is professor of policy, governance and ethics at Henley Business School.