A lot has been written about corporate governance and the role of the board. In these tough times, the board must rise to the occasion to steer the ship to safety and navigate the pandemic.
Here are the two insights to keep in mind:
1. Strong together. The board is strong if members work together and as a team. An individual non-executive board member has limited influence over the executive in terms of holding the executive team accountable.
The easiest way to influence and manage the board by the executive is using the divide and rule strategy. Many times, a chief executive officer will first contact an individual board member to get their buy-in in the desired decision before the full board meeting. For example, before a board meeting to approve the decision to close a non-performing branch or to decide over any contentious issue, individual board members are called or met in advance of the board meeting. Whereas this is a good approach to ease decision making, it could border on manipulation and influence peddling. An individual board member must be clear about such private calls and meetings with the executive else the line is crossed, and they could lose their relevancy and real and perceived independence.
Tip: as a board member, understand your mandate, and expectations. Stay alert of situations that could expose you to risks of compromise. You don’t want to be a board member who merely rubber stamps. Much as you should accept and receive calls from your executive management, request for supporting documents and try to ask the executive if they have been in contact with other board members over the same issue. That way, you have all the information you need to remain independent. You don’t want to be used as a pawn in the overall scheme of things. When in doubt, contact your board chairman and share notes.
2. Quality board meetings. Board performs its role effectively during board meetings. That is why missing a board meeting is the worst commission or omission by a board member since it renders the board to miss providing input into the decisions taken. To inform the board meetings, the executive prepares a board pack with critical information to be read before the board meeting. The best practice is that board packs are provided to board members at least two weeks before the board meeting. As a board member, speak with your board chair and agree on the minimum board practices for effective governance. Review the board charter and update it with the essential practices that improve your effectiveness especially concerning minimum notice for a board meeting, standard board paper templates, and time such papers should be prepared and provided to board members for review prior.
Tip: Receive and review the board papers in advance. Do not be too busy and attend the board meetings without having fully read and internalized the papers that had been sent earlier. You don’t want to ask questions that have already been addressed in the board papers.
Copyright Mustapha B Mugisa, 2020. All rights reserved.