Interim Chairman

Interim chair appointments happen at the least convenient moments: a sudden resignation, a health emergency, a governance failure, or a transaction that arrives before succession planning has caught up. Because they are made under pressure, they are frequently made badly — without terms, without an end date, and without anyone establishing what the interim is actually there to do.

This piece covers what the role is, when it is the right answer, who should take it, what UK governance requires, and the specific traps that turn a three-month arrangement into an eighteen-month drift.

When boards appoint an interim chair

Sudden departure. A chair resigns, is removed, or dies in post. The board needs someone in the seat immediately because meetings must still be chaired and the executive still needs a counterpart.

A search that will take time. A permanent chair search normally runs three to six months, longer where regulatory approval is required. Boards frequently underestimate this and appoint an interim once they realise the gap is real.

A governance problem involving the chair. Where the chair’s own conduct or effectiveness is the issue, someone else has to lead the board through resolving it. This is precisely the situation the senior independent director role exists for.

A transaction or crisis. A sale, a contested situation, an investigation or a covenant breach can require a chair with specific experience for a defined period, after which the board reverts.

Temporary absence. Illness or another unavoidable absence, where the chair is expected to return and the board simply needs cover.

The distinction that matters is between a gap and a problem. A gap needs continuity, and an internal appointment usually serves. A problem needs authority the existing board does not have, and that generally means going outside.

Who takes the role

The senior independent director route is the UK default and usually the right one. Under the Code the senior independent director already acts as a sounding board for the chair and as an intermediary for other directors and shareholders, and leads the process of appraising the chair’s performance. Stepping into the chair temporarily is a natural extension. Our SMF14 senior independent director page covers the role in more detail.

An external interim is the better answer when the board has lost confidence in itself, when an investor or regulator wants visible change, or when the situation needs experience nobody on the board has. It is also the cleaner option where several internal candidates want the permanent job, because appointing one of them as interim effectively pre-selects.

What UK governance requires

There is no separate legal category. Under section 250 of the Companies Act 2006 an interim chair is a director like any other, carrying identical statutory duties and identical exposure. The word “interim” describes the expected duration, not the standard applied.

Three points from the UK Corporate Governance Code bear on the appointment.

Independence on appointment. Provision 9 expects the chair to be independent on appointment, and that applies to an interim as much as a permanent chair. A board appointing a former chief executive as interim chair is departing from the Code and must explain it.

The chair should not lead their own succession. Where a chair is departing, the search for the successor is led by the senior independent director. An interim who intends to be a candidate for the permanent role has the same conflict, and should be excluded from the selection process.

The nine-year clock keeps running. Provision 19 measures a chair’s tenure from the date of first appointment to the board, not from becoming chair. A long-serving non-executive who steps up as interim may have very little runway left, which can quietly rule them out of the permanent role.

Regulated firms: the approval problem

In FCA-authorised firms the chair holds SMF9, a senior management function requiring regulatory approval before the individual performs it. That approval takes time, which is exactly what a board does not have when a chair departs suddenly.

The Senior Managers and Certification Regime anticipates this. There is a limited provision allowing temporary cover of a senior management function without prior approval where the absence is unforeseen and temporary, subject to a maximum period measured in weeks and to notification requirements. It is designed for exactly this situation, and it is not a route to an open-ended arrangement — boards relying on it need the permanent approval process running in parallel from day one. Confirm the current conditions against the FCA’s rules before relying on it.

The practical consequence is that regulated firms should identify a credible interim chair in advance, as part of board succession planning, rather than discovering the approval timetable during a crisis. We cover the appointment route on our SMF9 non-executive chair and FCA-regulated board governance pages.

What an interim chair is actually for

The most common mistake is expecting an interim to fix things. They rarely can, and the ones who try usually make matters worse.

What a good interim delivers is narrower and more valuable: the board keeps functioning, decisions that cannot wait still get made properly, the executive has a counterpart, and the permanent search is run without the pressure of an empty chair. In a crisis they also absorb the external demands — investors, regulators, sometimes press — that would otherwise fall on a chief executive already fully occupied.

What they should not attempt is a restructuring of the board, a change of strategy, or the removal of executives, unless that is explicitly the mandate and the board has agreed it. An interim acting beyond their remit creates decisions the permanent chair inherits without having made.

Where the board genuinely needs repair rather than cover, an independent board review alongside the interim appointment usually achieves more than asking one person to do both.

Terms, fees and the end date

Interim chair appointments go wrong in the paperwork more often than in the person.

Set a defined term with a review point rather than an open commitment. State whether the interim is eligible for the permanent role, and if they are, exclude them from the selection process. Specify the time commitment honestly — interim chairing is almost always heavier than the permanent role, because the interim is learning the business while running the board. Agree what happens if the search overruns, which it frequently does.

On fees, an interim chair is usually paid at or above the permanent chair rate, reflecting the intensity and the short notice, often structured monthly rather than as an annual retainer. Our NED and chair fee benchmarks set out the permanent chair ranges these are anchored to.

The real risk: interim by default

The failure mode is not a bad appointment. It is a reasonable appointment that never ends.

The pattern is consistent. A senior independent director steps up. They are competent, the board settles, the urgency fades, and the permanent search slips down the agenda. Eighteen months later the company has a chair who never went through a proper appointment process, a senior independent director seat that has been vacant throughout, and a board composition it would struggle to defend to an investor.

Two safeguards prevent it. Put a date in the board minutes at the point of appointment, and put the permanent search on the agenda as a standing item with an owner who is not the interim. Neither is difficult; both are routinely skipped.

Frequently asked questions

What is an interim chairman?

A director appointed to lead the board temporarily, usually while a permanent chair is recruited or while the incumbent is unable to serve. The role carries the same authority and the same legal duties as the permanent position.

How long does an interim chair usually serve?

Typically three to nine months, aligned to the permanent search. Longer arrangements tend to indicate a search that has stalled rather than a deliberate plan.

Can the senior independent director become interim chair?

Yes, and in UK listed companies this is the most common route. The board should then consider whether the senior independent director role needs temporary cover as well, since the two functions are meant to be separate.

Can an interim chair apply for the permanent role?

They can, but the board should decide the position at the outset and exclude them from the selection process if so. An interim running their own succession is the same conflict the Code addresses for departing chairs.

Does an interim chair need FCA approval?

In an authorised firm the chair function requires approval. There is a limited provision for temporary cover of an unforeseen absence without prior approval, subject to conditions and a maximum period, but the permanent application should run alongside it.

Is an interim chair paid more than a permanent one?

Often, on a pro-rated basis, reflecting a heavier time commitment and short notice. The structure is usually monthly rather than an annual fee.