Teams and team members with role clarity are substantially more effective than those without. Role clarity is a prerequisite for team performance. Equally, Boards and Board members with role clarity are substantially more effective than those without. Role ambiguity for the Board and Board members, on the other hand, is one of the greatest sources of stress in Boards. This blog post explores the core responsibilities for Boards and for individual Board members with a view to reducing the levels of stress in Boards and enhancing Board performance. Boards’ Core Responsibilities Amongst Boards’ core responsibilities include the following: Helping to shape the vision and mission of the organisation; Participating in and approving strategic and policy decisions; Ensuring Leadership of the organisation, encompassing: Selecting and developing the CEO; Help in the selection and development of members of Senior Management; and Ensuring succession planning for the CEO and members of Senior Management.
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The primary role of Boards is to provide direction and support to Executive Teams, balancing the interests of the organisations’ many stakeholders: senior management, customers, suppliers, financiers, government and the community at large. In most cases, the focus tends to be on compliance, for example, provisions of the Sarbanes-Oxley Act (USA), King IV, the Zimbabwe National Code of Corporate Governance and the recently promulgated Public Entities Corporate Governance Act (PECGA). Is such a focus adequate in this ruthlessly competitive global village? Compliance Requirements in the PECGA The PECGA provides that public entities in Zimbabwe comply with the following provisions: Board members appointment process; Board composition; Committees of the Board; Meetings of Boards; Board performance monitoring; Board members and senior management remuneration and allowances; Board members training and development; Board governance documents; Conflict of interests; Risk Management; Financial reporting; Annual General Meetings; and Annual reports. An impressive list indeed! Areas Beyond
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With corrupt practices having been woven into the fabric of organisational culture of most organisations, both public and private, most Boards have introduced whistleblower policies to curb this cancer. But are whistleblower policies a panacea for all corrupt practices in organisations? This piece post will unpack the issue in the context of board leadership. Whistleblower Policy In an effort to fight corrupt practices in organisations, every organisation should seriously consider adopting a Whistleblower Policy. Typically, a whistleblower policy should have the following provisions: Availability: Who should the policy be available to? Recipient/s: Who should receive reports from whistleblowers? Early Reporting: How soon should identified concerns be reported? Method: How should the identified concerns be reported? Reporting Standards: What identified concerns qualify to be reported? Confidentiality: Should the whistleblowers be promised confidentiality or not? The Process: What will happen as a consequence of the report or after the report has been
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The organisation’s ability to deliver against its mandate – whether it is financial success and/or success in the provision of basic services, such as garbage collection, clean water, electricity, telecommunications, transportation, health and education, is every Board’s dream. However, this will not come on its own, like manna from heaven. It takes deliberate effort by Boards and sound performance management processes, sometimes with the help of expert advice from consultants. This article is a high level exposé of typical errors in strategic performance management, the typical performance management cycle and provisions of the Public Entities Corporate Governance Act (PECGA), in relation to performance management processes in public entities. It focuses on performance management at Board level and at Senior Management level (i.e. the CEO and his or her direct reports). Typical Errors Readers will be able to recognise the typical errors in performance management below: No strategic plan in place.
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There has been, and continues to be, a great deal of discussion of the roles of the Board and the CEO, particularly in a scenario where the CEO is an Executive Director. Should the roles be complimentary or should they be of a ‘hide and seek’ nature? Some argue that too many Boards are so passive that their CEOs run rings around them, given that most Board members have time constraints and at times, limited knowledge and other limitations. This post is an attempt to unpack these issues. Best Practice Best Practice is that the roles of the Board and the CEO should be complimentary with the CEO initiating and recommending to the Board most of the new innovations in the organisation and the Board considering the CEO’s recommendations and either approving, modifying or turning down the recommendations. It should be noted that the Board’s primary role is to ensure
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No company, whether public quoted, private limited, state owned or community owned, would be happy with an ineffective Board – as a collective or individual Board members. There are many factors that impact the effectiveness of a Board. Most progressive Boards have recently added voluntary Board Performance Evaluation to this list of factors. This piece explores good practices in the area of Voluntary Board Performance Evaluation, covering some key considerations, bearing in mind that it is not a ‘one size fits all’ affair. Board Performance Dimensions Evaluated Best practice suggests that Boards should evaluate themselves in performance dimensions indicated below: Board Composition and Renewal Good corporate governance demands that in constituting itself, a Board should be alive to issues of gender, expertise, skills, knowledge, integrity and Board member independence. Considerations like Board terms and Voluntary Board performance evaluation are also important in Board renewal. Board Governance Systems Board governance systems,
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Many organisations find themselves in serious financial trouble due to financial haemorrhaging. This can be prevented or minimised through effective Board financial oversight. Through this oversight, the Board also assures shareholders, key stakeholders and the public, that all funds invested and all returns from the business are used strictly to support the vision and mission. Financial oversight is one of the most important Board responsibilities. Organisations run the risk of making headlines when Boards overlook or fail to relentlessly focus on this key responsibility. Financial Oversight Defined Financial oversight entails appropriately stewarding the financial resources of an organisation to prevent or minimise financial haemorrhage and ensure financial soundness of an organisation on a sustainable basis. Sources of Financial Haemorrhaging The Board should be alive to some notable sources of financial haemorrhaging in order to play its stewardship role more effectively. Below are some of them: Lack of Financial Expertise A
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By Panashe Maisva Having an innovation culture in an organisation is every investor’s dream. Amongst the key business outcomes that can be achieved through innovation include the following: Maximising ROI; Maximising business growth goals; Increasing productivity and, as a result, increasing profitability; Responding to industry disruptors and increasing market share; and Quickly responding to external challenges by developing human as well as technological resources to do things differently. Lofty business outcomes indeed! But if a survey was to be carried out amongst Boards on the level of awareness of the innovation process amongst Board members, guess what the results will show. This article is an exposé of the innovation process. Empathise – Define – Ideate – Prototype – Test Empathise Innovation is more likely to be triggered in organisations that are deliberate in promoting 360 degrees empathy in their interactions as part of their organisational culture. 360 degrees empathy is
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By Terence N. Chimanya A conflict of interest is a situation where an individual puts his/her personal interests ahead of those of the organisation. For example, where a board member enjoys a direct financial gain through the sale of an organisation’s property to the Director or to his/her spouse below market rates or where a contract is awarded to the Director or his/her spouse without going to tender. Indirect financial benefits can also arise such as awarding an employment contract to a friend or to a family member in a non-transparent manner. Why Attention in Managing Conflict of Interest Continues to Grow? Attention in managing conflict of interest continues to grow since the Enron, Parmalat and Polly Peck International scandals. Good governance remains fundamental to the success of any organisation. Board members have a fiduciary responsibility to act in the best interests of the organisation that they serve. They
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By Terrence N. Chimanya While much of the focus on Integrated Board Reporting has been on the needs of external stakeholders, the necessity for better internal decision making can be significantly improved through utilising the six capitals approach (i.e. financial capital, manufacturing capital, human capital, social and relationship capital, intellectual capital, and natural capital). A Case Study In 2011, I worked on an assignment for a United Kingdom based service company to incorporate a governance and sustainability checklist into their strategic planning process, through which the impact of all six capitals was considered as it pertained to the risk of investing or not investing financial capital in order to sustain competitive capability and advantage. The approach was simple and assessed several aspects of each capital as high risk (red), medium risk (amber) or low risk (green). This simple approach quickly identified that there were several areas where lack of sustainable
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