“The board’s task is to direct, which is why directors are so called. The primary role of the board is to determine the purpose of the enterprise, agree the strategies to achieve those goals, and lay the values and policies that guide management as they run the business” – Bob Tricker in The Economist “Directors: An A-Z Guide”.
The topic of corporate governance has continued to gain importance as nations realise the risks of having poorly run enterprises. Charitable organisations are not excluded from surveillance by policies designed to protect their stakeholders. Due to multiple financial and corporate crises, the role of directors has come under closer scrutiny while the responsibilities of being a director is graver than it has ever been in in the eyes of the law. In financial services in particular, regulators retain powers to dissolve and replace boards whenever there are breaches of conduct or failures in governance. These developments suggest that directors should have a better understanding of their roles as organisational leaders and guardians of corporate wellness. For those that direct the C-Suite of corporate entities, this article prescribes four perspectives for enhancing leadership at board level.
Continuous learning
No matter how experienced directors may be, there would always be things to learn about their organisations. Evolving regulations and standards in finance, industry changes and financial statements represent some learning areas for directors. The collapse of many companies can be attributedto the weakness of directors and to multiple ignorance at board level. This enables managers hoodwink directors about the prospects of the business when in fact matters have gone downhill. It is recommended that directors get as much training as the managers they direct are getting.
Being new to an industry heightens the necessityto learn about the relevant processes. Board meetings will not provide adequate lessons about how the business functions. The A-Z Guide referred to in the opening quote to this article provides a board induction checklist that includes knowledge of the company, the business, and the financials. Such knowledge has to be deliberately acquired the way students would get to grips with their subjects.
Consistent communication
Communication between the board and management is a leading imperative for organisational success. The fact that directors are to maintain space for managerial expression does not diminish the value of communication especially between the board chair and the CEO. The communication should not be limited to circulating memos and minutes of board meetings. Rather, there should be formal and informal channels of communication to ensure that directors are not left in the dark. Indeed, the demise of many corporate entities results partly from boards not having enough information to take proper decisions.
Directors are entitled to as much information as they consider necessary to perform their duties. Ad hoc reports, presentations, board briefings and individual updates will prove immensely valuable as communication mechanisms between management and directors. Directors should also deliberately seek clarification from executives on issues that might appear fuzzy. Directors must remember that corporate dizzy spells begin with fuzzy and insufficient information. Leadership at board level requires communication skills.
Mentoring
The ages of CEOs in the corporate world is getting lower as the days of the experienced CEO disappears. This brings with it a lack of experience which should be mitigated through mentoring by capable directors. Mentoring will empower a CEO and other C-suite executives to relate with knowledgeable directors on a variety of themes and learn from their stories.
Directors with specialist skills or knowledge can be assigned to support executive learning. Yet, mentoring will invite a positive learning attitude in executives and not false assumptions of expertise. Mentoring will also be aided by informal communication between executives and directors. Calls to seek clarity on issues, documents sent in advance and planned discussions all serve as comfortable but effective mentoring options.
Unity of directors
The end of a corporate entity is sometimes signalled by the loss of unity at board level. Directors have to be intentional about maintaining unity of purpose and direction. Board unity provides example for the management team and makes it easier for directors to insist on what is best for the organisation rather than what sounds good to the CEO or his team.
Board chairpersons play a critical role in uniting views and keeping conversations strategic. Having independent directors creates a balancing mechanism and a lever of unity. My experience in working with organisations suggests that harmonious relationships at board level have a positive influence on corporate outcomes. On the contrary, a biblical verse states that “where there is strife, there is confusion and every evil work”. Engendering strife is definitely not a leadership skill that directors need.
Closing note
To enhance leadership at board level requires continuous learning, consistent communication, mentoring and unity of directors.
Weyinmi Jemide
