Particularly in Africa the talk of leadership can never be enough. The struggle for the development of the continent is largely if not singularly attributed to poor leadership. While many have tried to discuss leadership in various ways, the overriding question is how to cultivate the attributes that influence human action? Over and again the level of leadership success is attained by the influence of human actions. In recent times, the “cleaning up” of Ghana’s financial sector has opened up the discussion for effective leadership with views oscillating ‘to and fro’ like the pendulum.
While some commentators have come hard on the board members of the defunct financial institutions, others have thoughtfully reflected on the nuances of corporate governance and suggested possible ways to addressing the issues. I belong to the latter group.
Leadership is the opportunity to direct the affairs of followers. This becomes possible by the privilege given to the leader by the people. In essence, the people expect some deliverables without which they describe the leader as a failure. Some have argued strongly that the leader has no excuse for failure if the necessary steps are not taken to avert or mitigate the failure.
In the ensuing surge in Ghana’s financial sector, this article is aimed at giving a perspective analysis of leadership in corporate governance and what may have led to some of the failures in the financial institutions.
In the forgoing paragraphs, I will enumerate on seven points that can ‘make or break’ leadership qualities in corporate governance.
- Technical knowledge
Considering the technical knowledge of persons appointed unto a board is important to achieving the board’s objectives. But we are minded that a combination of persons with different expertise are put to together to form a formidable board so for instance not all members of a board of a financial institution should have technical knowledge in financing.
I am not by any means advocating for appointment of members of aboard who have not knowledge in the core duties of the institution they are serving. It is appreciated that particularly for a private sector business as serious as a financial institution will not appoint board members who have no knowledge in finance.
Equally, it is prudent for persons appointed unto boards of institutions that have technicalities to have some appreciable technical knowledge in the operations of the institution. To this extent, though technical knowledge is important, it is not a ‘do or die’ situation for persons to have utmost technical knowledge of an institution before been appointed unto its board.
What I abhor are persons who have not demonstrated competence or experience in managing affairs of a particular or related institution before been appointed unto its board. In the case of the board members of the defunct financial institutions in Ghana, I am yet to read of any of them who does not have the competence or experience in managing organisations prior to their appointment.
Until incompetence is proven, the fact supports my assertion that they have reasonable technical knowledge to be on the boards of those financial institutions. The failure of those institutions cannot be wholly attributed to lack of technical knowledge of the board members.
- Communication skills
Some management and communication scholars have argued that at the top level management communication skills supersedes technical skills. Communication is a two way flow of information where parties in the communication seek understanding. In other to understand, parties are expected to listen.
There is a clear distinction between listening and hearing. In management for decision making, we are expected to listen so as to solicit understanding. Contrarily, hearing is just the mere reverberation of sound in au unrhymed patterns.
My inclination in some of the challenges in practicing corporate governance among organisational board members is the lack of effective communication skills. A lot of the difficulties in the level of work in many organisations emanate as a result of communication challenges from meetings.
When communication goes wrong, everything else goes wrong. I will strongly recommend communication skills for effective leadership with organisational board members as principal participants. The training must be organisation focus so as to address peculiar communication challenges that confronts the business.
This training must be held in three phases; one, strictly for board members, two, joint training for board members and management staff and thirdly, joint training among board members, management staff and general employees. This will ensure cohesion that will foster good communication for business success.
Also communication with external stakeholders is very important for board members. When communication breaks down with external stakeholders that is where things that could have been kept quietly gets into the public domain.
- Research skills
Part of the qualification for appointment unto a board must be research skills. Either members of the board have the research skills qualification and/or a penchant for research. Research is a life wire for the relevance of any organisational board member.
Many of the difficulties that may have plunged some financial institutions in Ghana can be attributed to the lack of research by the board members and that may have resulted in not perceiving the signals of the coming failure.
Good research fortifies the knowledge of board members which in turn enhances their corporate governance practice. Research sharpens curiosity which leads to the discovery of new knowledge and/or reminder of previous knowledge that may have been forgotten.
In modern ways of communication, research has moved from purely reading hard copy texts to include listening on various media like YouTube and the media platforms available. The internet has enhanced research in ways that even the least interested learner should be able to research with smart phone connected to the internet.
Corporate governance in the financial sector may be poor due to the nature of operations in financial institutions in Ghana which mainly hinge on figures. Financial inclusion involves understanding the literature of finance which is not limited to figures. This is why in other developed countries it is common to have people in finance who studied classics in the university. I guess this phenomenon is gradually catching up in developing countries.
- Supervisory role
Another reason that may have contributed to the fall of some financial institutions in Ghana is the lack of supervisory role of the members of the board leading to lapses in their corporate governance. In as much as not all board members may have the technical skills, it is important that they follow up on their supervisory role with the people they delegate to.
It seems many executives who do well to delegate responsibilities fail to supervise the work delegated. This may stem from the fact that executives who delegate responsibilities turn to be over confident until of the worse happens. Again this may happen because if nature of work delegated is technical and the executive do not have the technical knowledge; they may be under the impression that what has been done is good.
The lack of supervisory role could also be because board members have more work on their plate. They may be serving on many boards and multitasked therefore they have little time for each organisation they are serving.
Whatever reason it may be, the lack of supervision by board members to subordinates or even consultants is no excuse. Any board member who failed to supervise enough because of over confidence in the competence of their subordinates should be blamed for the mishap of their financial institutions.
ABOUT THE AUTHOR
Nii Armah Addy is a Chartered Management Consultant and an Educationist. He is the Founder of the Institute of Leadership and Management in Education (InLaME), and the Principal of the Institute of Professional Event Management (IPEM). InLaME is a management consultancy firm with a unique practice tailored to improve their clients’ management profitability. IPEM is accredited by NABPTEX to provide professional event management education and award certified certificates.