Challenges of a board of directors

Challenges of a board of directors

The roles and responsibilities of directors depend on the nature of business and the regulatory framework governing the organisation.  The key roles and responsibility of directors include the following among others;

  • Recruiting chief executive officer
  • Approving the strategy and road map for its implementation
  • Policy formulation
  • Protecting the interests of the shareholders
  • Spokesmen of the company
  • Monitoring and control

The implementation of the above roles and responsibilities requires a lot of planning and preparation on the side of the board. The board for sure cannot sit back relaxed and expect management to implement its agenda. The agenda of management is to implement the business plan and policies as passed by the board and to manage the business on to day to day basis. The responsibility of the board is as stated above.  The key challenges the board faces include the following;

Driven by management

Some boards of organisations sit back and wait to attend board meetings called by the chief executive   officer (CEO) to deliberate on the agenda designed by CEO. It is the CEO who determines the format and content of information going to the board. The information could be too much or too little and sometimes irrelevant. The timing of the meeting is also fixed by the CEO. There are some CEOs who tend to waste the time of the board.  The board for sure is left at mercy of CEO. Nothing will go wrong if the CEO is doing the right things. Having always the best and effective CEOs is extremely difficult to attain hence the need for the board to determine its own agenda. To arrive at its own agenda, the board must agree on the following;

  • The timing of board meeting
  • The timing and format of board papers
  • The information which should be sent to the board on monthly or regular
  • The communication between and management
  • The format on monitoring and control reports
  • The content of board minutes

Lack of adequate sector information

It is generally assumed that the new board members will be given a comprehensive induction training programme covering the business and how it is organised, the sector information and general business environment among others. Without adequate capacity building for sure some board members will be very ignorant about sector information.  It will be impossible for the board to achieve its goals if they are not quite knowledgeable with sector issues.

Technical information

I have been a recipient of long board papers with too much technical information and unexplained abbreviation. At first it was a challenge for me to say that I do not understand the technical papers. The first time I did I was told by one of the managers that I could get the details from an operation manual. The manager comment could imply that I was their time with information I could get a manual read. I was not deterred by the negative comments from insisting on setting our own agenda. I continued until management saw out point of view. It is important to that there is always a high risk when the board members approve board technical papers which they don’t  not understand. The board has right to request for more time to read the technical board papers.   The board can also insist in the technical reports being put in a format which is easily understandable by the board.

Timing of board papers

Board members are often ambushed by management with a request to urgently approve a proposal or report when they have not hard enough time to read and digest it.  The board should not be pressurized into approving a request which they have had enough time to digest.  The reasons for the urgent   request should be considered and the request should be declined if the reasons are not convincing enough. Board members should be prepared for the board meeting if they have to be useful in the meeting.

Independence of the board member

There is also a danger of the board members losing their independence if they are relying on management for facilitation in order to perform their work. For example if board allowances have not been paid for some time and the board is relying on the CEO for their transport and out of pocket expenses. The allowance given to the board members must be adequate and promptly paid.

Author

John Muhaise Bikalemesa

Director: Big Drum Advisory Services Limited

johnmuhaisebikalemesa@yahoo.com

About The Author

John Muhaise-Bikalemesa (JMB), is the founder of Muhaise.com blog and bigdrumassociates.com company. Learn more about him here and connect with him on his social medias below

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