Corporate institutions need board evaluation to rebuild public confidence, drive performance – Okechukwu

In recent years, corporate governance has taken center stage in Nigeria’s business and financial landscape. At the heart of this evolution is the growing recognition that effective boards are critical to organisational performance, trust, and sustainability. Akachukwu Okechukwu, a seasoned legal practitioner, management consultant and corporate governance expert with extensive experience advising boards in Nigeria’s financial services sector, in this interview shares insights on the role of board evaluation in driving stronger performance and rebuilding public confidence in Nigeria’s corporate institutions. Known for his thought leadership on board dynamics, shareholder activism, and governance reforms, he also talks about how his years of experience working with directors have strengthened board effectiveness and embedded governance best practices. EMMANUEL SALAWU brings the excerpt:

As a renowned expert with extensive experience in board evaluation and corporate governance issues, why is board evaluation important in the corporate environment?

The board provides guidance and leadership oversight for an organisation. It sets vision and strategic goals, ensures management executes the same effectively and safeguards the interests of the shareholders and other stakeholders. In other words, the effectiveness of any organisation largely depends on the effectiveness of its governance structure, especially the board.

Again, the success of an organisation depends on patronage, which in turn depends on the trust it has cultivated amongst its various stakeholders.

Thus, for greater accountability and optimised effectiveness, a periodic evaluation of the Board is required. This is to assess the Board’s performance, identify gaps (whether in composition, commitment, skills, independence, amongst other factors) and provide a basis for continuous improvement.

To put it simply, Board evaluation provides a foundation for stronger corporate performance and for rebuilding trust in Nigeria’s corporate sector.

How would you advise a company to approach its board evaluation?

Globally, the best practice on board evaluation goes beyond a box-ticking compliance exercise. It is about creating a culture of continuous improvement at the board level. Thus, it must be done periodically and not a one-off exercise. It should also honestly and comprehensively assess the Board as a whole- its committees, and the contribution of individual directors. It should cover strategy oversight, risk management, diversity, culture, succession planning, and stakeholder engagement. The outcome should induce action and not merely end with a glossy report. Overall, the process should be honest, rigorous and forward-looking.

There are basically three layers of evaluation: The internal assessment, usually facilitated by the chairman or company secretary, using a structured questionnaire. We have the peer review assessment in which the directors assess each other, and lastly, the independent third-party evaluation.

In Nigeria, CAMA 2020 and the NCCG 2018 both encourage structured, independent assessments at intervals. Board evaluation becomes most impactful with the combination of self-reflection and external validation.

In practice, does board evaluation actually translate to stronger corporate performance?

When done properly, yes. Doing it properly means the company treating board evaluation as not just a compliance requirement but rather a performance tool, and the evaluation process being undertaken with sincerity of purpose, especially from the board.

In this situation, board evaluation keeps the directors focused on the strategic goals, identifies areas of improvement and signifies accountability, which in turn boosts investor and public confidence.

Where there is follow-up action on the outcome, such as board renewal, training and strategy reviews, then the process is sure to guarantee visible improvement in corporate performance.

What are the challenges Nigerian boards face with evaluation?

Some boards may be reluctant to undertake an evaluation or optimise the process due to several reasons. Firstly, a board that views the process as a mere compliance requirement will certainly not get the best out of it. Again, some directors may view such an evaluation as a threat to their position and may be reluctant to undertake it, or, where it does, to do so with sincerity and openness. Some boards may also nurse fears that sensitive feedback may leak. This discourages honest participation. Other boards may use a ‘one size fits all’ model rather than a model tailored for its specific industry, strategy and risks. Again, some boards are not even well enlightened on the importance of this process, and cost considerations may also discourage a board from an independent 3rd party facilitated evaluation.

Even when evaluations identify gaps, many boards often fail to implement action plans or track progress.

From your experience, what steps would you recommend for Nigerian companies?

I will start by urging companies to treat this as part of continuous improvement, not an annual compliance ritual. A combination of internal and external assessments should be used. A safe, confidential environment where directors can give candid feedback without fear of repercussion will encourage honest participation. There should be clarity on what the company intends to achieve through the process. The tools and questionnaires should also be customised to the company’s strategy, size, and industry risks, rather than using generic templates. Companies should also leverage technology, for instance, by using digital platforms for anonymous surveys and data analysis.

Other practical steps include following up on the outcome with action, reviewing and tracking progress on action, as well as linking evaluation outcomes to tenure renewals.

What is your view on the future of board evaluation in Nigeria?

The future of board evaluation in Nigeria will be shaped by 3 major factors: increasing demand for compliance by regulators, growing shareholders’ clamour for accountability and rising level of awareness by companies of how the process assists in improving strategy, risk oversight, and governance culture.

With these driving forces in full gear, I see companies embracing the process, whether out of internal conviction or regulatory/shareholders’ compulsion. I see board evaluations progressing beyond a ritual.

I see an increased integration of evaluation with technology. I see greater transparency and governance disclosures. Future evaluations will not only assess financial oversight but also how boards handle environmental, social, and governance (ESG) responsibilities, a fast-rising global standard.