A book like this—“50 NIGERIA’S BOARDROOM LEADERS—LESSONS ON CORPORATE GOVERNANCE AND STRATEGY” By Mike Awoyinfa, Dimgba Igwe and Jibril Musa—is relevant because it is important for workers generally to know what goes on in the boardroom and how a board functions. I believe when they get to know what goes on there, they will have more confidence in what comes out from the board. Importantly, they will be more interested in who becomes a director on the board, in the sense of what he is bringing to the board and the company, even though they are not in a position to select him.
A book of this enormity will be of good value to shareholders to know more about the board, how it functions, and therefore in taking decisions of who to be directors, they will be better guided.
It is unthinkable that some companies can exist without boards. How would you manage a company like Unilever without a board? A company that operates in virtually all the continents of the world, with presence in 150 countries, how would its operations be coordinated without a board in place? A board is necessary to an enterprise. Call it a council or whatever by name, as long as it is a body of people who on behalf of the organisation take decisions and pass such to the managers to execute, and from time to time, monitor what the executives are doing. That is a board. Nowadays, it is an essential part of business.
Generally, a board oversees what happens in a company. However, its function goes beyond just overseeing in the sense that it is the actual body that determines the strategy of the business. Strategy doesn’t have to be initiated at the board level though. It may be initiated at the management level, but management brings it to the board where, with the wealth of knowledge and experience of directors, it is refined in the light of the mission and vision of the business. Quite often, useful inputs are infused into the strategy. It is especially important that the board debates it, discusses it and then approves it.
Non-executive directors are vital cogwheels of an organisation. They are part of what happens in the organisation, not necessarily on day-to-day basis, but at policy level. The board determines the direction of the business. And when you talk of the direction of the business, apart from strategy, from the strategy will emanate the annual plans and the budget that the company works on. So the board has a very important responsibility. And because it is composed of people with different background and experiences, the board should enrich whatever comes from management.
A board’s duty is not confined to the routine of just endorsing. The board must scrutinize as well as improve or enrich. In other words, the board must add value to what comes from management or issues concerning the company. Otherwise it is of no relevance. That is why a board must not be made of cronies, but of people who have value to add to the business.
BEAUTY OF THE BOARD
In terms of size, the minimum number for board membership is three. I don’t think there is a maximum number. Of course, you cannot have a board of a thousand directors. A board’s size must be according to the needs of the enterprise, usually between seven and fifteen. Beyond fifteen, there are not many that I know of.
A board should lend itself to diversity. Directors should come from diverse professions. That is the beauty of the board. The range of diversity, however, depends on the business and its nature. For instance, in most boards you will find someone with accounting background and someone else with a legal background. If it is an engineering company, you will find a director with engineering background. Frequently you find people with strategic management background. If it is a marketing company, someone with a rich marketing experience will be on its board. The diversity of the composition depends on the nature of the business.
HUNTING FOR BOARDROOM TALENTS
To bring an individual on board as a director, a number of things must be considered. The first one is a good track record, followed by a host of other considerations. Is he honest? Is he respectable? Is he a man or woman of impeccable character? Is he a man of integrity, a man who is ethical in the way he does things? Is he a man whose lifestyle will not bring disrepute to the organisation? Is he one who can add value to what the company is doing, somebody who is capable of analyzing situations and helping to resolve knotty issues?
(For more on the professorial boardroom guru Felix Ohiwerei, ask for your copy of ‘50 NIGERIA’S BOARDROOM LEADERS’. Enquiries: [email protected], 08033445125)