The board may fail to deliver on its role of providing leadership (direction) and oversight (paying attention) to the organization for the organization to meet its goals and eventually its mission because of several roadblocks. In this article, I am sharing my views on key roadblocks or barriers preventing a board from being effective in the Ugandan environment. Some of the roadblocks are like huge elephants and everyone is scared of talking about them for fear of the consequences.
The induction program is not properly and adequately organized to welcome new board members to the organization so that they can play their role of leadership and oversight. Quite often it is wrongly assumed that the new board member’s wider knowledge of the economy and experience with other organizations is more than adequate. The wider knowledge will not equip the new board members with information relating to the unique role, culture, and operations of the board of a particular organization. It is, therefore, necessary to have a tailored induction program for the new board members. The program should include among other things the reading of documents, physical meetings with departmental heads and key stakeholders, walking around the organization, and actual physical training. The program should be a bit spread out time-wise to allow the easy intake of new knowledge. The induction program makes it easier for the new board to understand the business of the organization including the strategy that will lead to the achievement of its goals and eventually the mission.
Continuous capacity building
Several organizations do not have a formal training plan in place to continuously enhance the capacity of the board members. Where training programs exist, they are not linked to the training needs of individual board members. In this era of technology, there should be a deliberate effort to equip the board members with the necessary knowledge and technology that will enable them to safely deliver on their agenda.
Board skill mix
For the board to achieve its role, it must have board members with the right skill mix to enable them to effectively deliberate on technical and specialized management papers. The right skill mix at the board level should at least cover areas of finance, human capital, risk, legal, sector expertise, technology, and economy among others. It is difficult to satisfy the role of the board of providing leadership and oversight to the organization if the right skill mix is missing.
The board sometimes does not appreciate the system by which the organization is directed and controlled. They should clearly understand the role and responsibilities of shareholders, directors, management, external and internal auditors, and regulators among others in directing and controlling the organization. There will be a lot of conflicts created by the board if governance is not clearly understood. The board charter should also be developed to address the governance issues at the board level.
The board members must appreciate the plan to move the organization from its current state to its desired future state. The plan is to enable the organization to achieve its goals and eventually its mission. Some board members may also lack a clear appreciation of the strategy-making process from beginning to end. This is mainly because of individual board members’ different backgrounds and exposure. To overcome the above, management should guide the board through the process of strategy formulation, implementation, and monitoring.
The board will rubber-stamp a finished strategy because of a lack of appreciation of the strategy formulation process. The strategy is brought to the board for approval either as a formality or to meet the regulator’s requirements. Certainly, the board cannot effectively give direction and oversight on the organization’s journey if the board does not understand it.
Walks the talk
Almost all roadblocks or barriers in the organization start at board level in line with the phrase that states “fish starts rotting from the head”. These roadblocks are caused by actions or omissions by the board. The board must live or do what they say and in addition, they must talk about and resolve the big and difficult roadblocks in an organization without fear or favour.
Setting the board agenda
I have had board members complain that they have not been given an agenda by management. The board must set its agenda but obviously with the support of the management team and not simply adopt the agenda as given. The board-developed agenda should promote effective deliberations during meetings. The important issues should come first and housekeeping issues last. The important board agenda should include at least the following;
- Chief executive reports that include an overall review of the economy, strategy review, and organization performance;
- Competitor analysis;
- Reports of committees of the board and
- Policy formulation.
In my view, the board papers submitted to the board tend to be too long for reading and are not timely submitted. I have seen board papers that are exact copies of management reports. The board papers should be summarised to contain only the information necessary to enable the board to discuss and make decisions. The board must make it clear from the start that management should only give brief and precise reports that will enable it to make informed decisions. The board should only pronounce itself on the bigger and broader issues that are critical for the success of the organization. The critical issues include the following;
- Passing of policies that will provide guidelines for decision-making;
- Making major decisions including capital investment;
- Hiring of senior management;
- Declaration of dividends;
- Business restructuring;
- Onboarding of key external service providers;
- Oversight over performance and
- Supporting in the role as a voice or ambassador of the organization.
The board should work with the chief executive officer (CEO) and his/her team to address the above-discussed roadblocks among others that stand in the way of the board delivering on its leadership and oversight role to the organization.