In part 1 of this article, I gave a broad introduction to leadership with specific reference to corporate governance. The problem of leadership failure in Africa is so endemic that few institutions can be pointed to have achieved trans-generational success. Every now and then, the call for effective leadership in corporate governance is beckoning as the only means to industry growth in Africa.
Part 1 looked at four points as follows: technical knowledge, communication skills, research skills and supervisory role. These points can ‘make or break’ leadership qualities. This final part of the article, I will discuss the remaining three points to make up a total of seven points set out to ‘make or break’ leadership qualities in corporate governance. These three points are delegation of duty, over familiarisation and previous success and failure. In the following paragraphs, I will discuss the three points listed.
- Delegation of work
Delegation of duty is one of the most important attribute every board member must possess. The magnitude of work required of board members of financial institutions is no mean a small task. The technicalities involved to deliver quality work require that no single board member can efficiently do all what is required without delegating some of the work.
Delegation of work simply means giving a part of the work to other people who have the required competence to deliver to expectation. Since financial work involves technicalities and certain expertise, it is necessary for board members of financial institutions to delegate work to others who have the competence to deliver and/or advise them.
Though the selection of board members require that members are selected with qualifications and experiences to oversee the responsibilities of the institution, it is common to have board members who may not always have grip on some issues that arises. It is therefore necessary for board members to consult expert opinion so as to make an informed decision when the matter is tabled at board meeting.
Because of the additional cost that may come with such consultation, and the fact that there are other board members, a member may take it for granted that other members may have good knowledge on the subject and will therefore rely on their contribution. Let us be reminded that the whole can be ignorant about a matter and if they are not humble to accept that they don’t know, they may accept any decision by a member who is usually eloquent on matters.
Often and as always the case, when corporate decisions go wrong, the board members bears the axe. Board members can barely exonerate themselves from bad decisions not because they made those decisions but because they failed to play an active role in the decision making process. Permit me to say that in such instances, it is usually the board chair that suffers the deepest chopping by the axe.
On the basis of the preceding paragraph, it is not advisable for a board chair of a financial institution to work in isolation. There is the important need to delegate work to experts outside the institution and board for advice. Negligent of the fact that getting an expert independent opinion is a sure way to contributing to the success of an institution will be to the detriment of the board chair.
- Over familiarity
Over familiarity can be cancerous. It starts without notice and spreads so fast that at the point of notice it difficult to cure it. Even the application of ‘chemotherapy’ like response is most likely to worsen the situation leading to the natural consequence; which is the death of the institution.
The relationship among a board chair, board members and staff of the institution must be treated jointly and separately. I will explain the permutation.
- Relationship between a board chair and board members
It is a fact that the board chair is an individual whose position has little leadership relevance without board members. A leader must always have follows. The leader and the followers must be in unison in order to work towards the achievement of goals. As much as the board members are necessary to compliment the board chair, there is relatively significant difference in what is expected of them for the success of the institution.
It is good for a board chair to have trust in the board members but could be detrimental by over familiarity. As the saying goes “over familiarity breeds contempt” this is vice versa. A board chair over familiarity relation with board members may lead to the board chair over reliance of contributions of board members particularly when those board members have superior technical skills than the board chair.
Over familiarisation between board chair and board members can lead to little or no scrutiny of work done mostly when those board members are in day to day administrative positions in the institution. Such relationship can create problems for the institution.
- Relationship between the board and staff
Over familiarisation between board and staff can have dire consequence for the success of the institution. The capacity of the board should be distinctly distinguish from that of the staff even when some board members double as staff members. The tendency for board members who doubles as staff members can influence some board decisions at meeting. Over familiarity should not be permitted to override the strict rule of the dealing of the board with the dealing of the institution and its staff. There must be overtly clear separation of powers, checks and balances.
- Previous success and failure
In instances where the board chair was appointed when the institution is enjoying some levels of success, it becomes easy for the board chair to swim in the flow. After all, the institution must be doing something great to warrant the success they are enjoying. Likewise when a board chair is appointed during times of failure of the institution, the chair may want to exert some pressure to ensure a turn around.
The danger in this scenario is when the institution is enjoying or has a trajectory of success prior to the appointment of the board chair. There must be a standard of rule by which the board chair can measure the operations of the institution. Be it success or failure, the standard of rule must be applied stringently.
When a board chair mistakenly rides on the heels of previous success and relents on current happenings, she is bound to cloud her sense of judgement based on previous success when current happenings may be showing hazardous signs of regression. This can be averted when benchmarks are followed and expected growth is carefully monitored.
Thinking broadly, I will summarily attribute the emerging difficulties in the Ghanaian financial sector to three cardinal failures engineered by the conformist aberration by the board members of the various financial institutions leadership. I vehemently disagree to any gestures and/or utterances which suggest that board members intentionally took decisions that benefited them individually to the detriment of their financial institutions.
The three cardinal points that led to the failure are: time management, over politicisation and work culture. In brief, they failed on time management because they did not make the requisite time expected of their leadership role to ensure that proper checks and balances are practiced.
Also, another reason for failure was the over politicisation of corporate institutions. Their reliance on which political party is in power and the opportunities that may be available to them took away their reasonable judgement of the real performance of their business. To this end, I will caution that corporate institutions separate their political involvement from their business operations.
Lastly, the work culture required of any financial institution to progress is completely not in sight of Ghanaian financial institutions. Many marketing surveys pointed financial institutions as ones with the least customer satisfaction rating. I guess Ghanaian financial institutions are not adjusted to international best practices not only in their customer approach but also in their choices of investment that has been time tested and less failure prevalent. Board members must be vigilant to avert public ridicule.