The time I have spent on different boards has given me a chance to enhance my leadership and oversight experience through networking with fellow board members and deliberations of papers submitted to the board by management.
I have attended several face-to-face meetings with senior management, internal and external auditors, and other stakeholders that have further enhanced my knowledge.
The varied skills and experiences of colleagues on boards have greatly enriched the discussions in the boardroom.
I am therefore pleased to share some of the lessons learned in the paragraphs below.
Board drives performance
The role of the board is basically to provide leadership and conduct oversight roles in a given company. The board focuses on the strategic roles of directing and controlling the affairs of a company. Management is left with the responsibility of implementing the approved business plan that will lead the company to achieve its goals and objectives. I have concluded that an effective board has a direct impact on the smooth running of the company and its performance. Therefore, the driving force in the success journey of a company is the board.
Common issues cutting across sectors
I have been on boards of organizations operating in the sectors of finance, construction, agriculture, real estate, and education among others. I have noted the following issues are common in all organizations;
- Strategic direction spearheaded by the board;
- Dealing with the ever-increasing pressure from the regulators;
- Developing and managing a winning team;
- Handling change and business communication;
- Leading by example;
- Managing shareholders’ activism;
- Monitoring performance against plan and
- Risk management.
The above challenges tend to be multidimensional hence requiring directors with varied skills and experience to solve them. I have also appreciated the need to approach challenges with a sober mind and avoid being in a state of panic to arrive at satisfactory solutions.
Asking tough questions
To clearly understand and appreciate the board papers submitted by management, there is a need to ask tough questions. The tough questions will sometimes force management to rethink their proposed actions and plans. I have seen and witnessed management withdrawing board papers for reconsideration because of unanswered tough questions from the board. I have also noticed management tends to take extra care in preparing board papers if it knows that tough questions may be asked.
The importance of having the right skill mix
The challenges facing today’s companies require solutions that have been arrived at by a board that has the right skills mix. For example, a challenge in leveraging investment in technology may require the input of directors with skills in finance, human resources, technology, and risk among others. For a board to be effective, it requires board members who come from different disciplines and possess varied sector experience. The composition of the board with members that have a varied skills mix and diversity is increasingly becoming a must.
The importance of communication
There must be effective communication at the board level to ensure all board members are kept informed of the issues requiring their attention. The channels of communication should be made known to all members. The secretary to the board is the right person to provide a communication link among the board members and between the board and management. The secretary will ensure a smooth flow of information from and to the board.
The importance of team spirit at the board level
I have come to appreciate that team-building activities including capacity-building, dinners, and customer functions among others play a key role in creating a team spirit at the board level. The team-building activities enable the board members to cooperate and work together in rendering leadership and oversight roles. With an effective team spirit, the board will be able to execute its roles through the various board governance structures.
The vital role of the chairman
The effectiveness of the board depends on the ability of the chairman to lead the board to concentrate on strategic and priority matters that will make the company achieve its goals and objectives. The chairman coordinates the setting of the board agenda that guides both management and the board. The chairman also introduces the board code of conduct that will guide the behavior of the board members. During the board meeting, the chairman ensures meetings are run in an orderly manner as guided by the agenda
Conclusion
The boards have exposed me to the practical aspects of the leadership and oversight roles of the board in the company’s governance structure. I have seen how effective board governance positively impacts the company’s performance. I have also benefited a lot from the knowledge shared by my colleagues who have different skills and sector experience from mine.