How to get a seat on the board

Proctor Nyemba

THE board of directors is the top decision-making body in business.

People who usually appoint it have clear expectations that they have and what delivered.

So, how does a board member man­age these expectations?

Undertake personal development

Many times, appointment to the board is not based on the insights somebody brings on the table. If that’s the case, the board member should identify some skills if he is going to add value to the business.

They must undertake continuous education in the key areas of the business. If you are appointed on the board of the bank, you must understand banking.

Who is the main competitor in the five to ten years to come? What is going to be driving the banking sector? In this case you are able to review the strategy and tell whether the bank is moving in the right direction.

Articulating strategy

Since the board is responsible for over­sight and risk management, they must first articulate the strategy of the busi­ness. And the values by which they are going to deliver. Traditionally, we used to say: mission, vision and values of the business. Of late, we look at what is the winning aspiration, where will we play and how we will play? What busi­nesses will do and what won’t do!

The board is expected to articulate and live these values.

They should ensure that all the stakeholders in the company get these values. Board members should live by example and be active advocates and ambassadors for the values.

You don’t give a value and fail to live it.

You cannot tell people to come early to office yet you are in the habit of coming late.

Secrecy

Effective board members must maintain the highest level of confidentiality, build good corporate culture and fully support board decisions. How do you make decisions and see them through? How do you gain critical informa­tion about the business and ensure that you do not release it to the public?

If it is business, it has to have a strategy.

This is a confidential property document. How do you ensure that at individual level you are practicing confidentiality?

For example, some board members receive emails on their laptops or mobile phones. When they reach home, the wife or the children begin using the same laptops.

In the process, the confidential company information might be emailed out.

At individual level, do you acknowl­edge that the information you receive is confidential?

Board members normally are given hard copy board papers. They put the papers in their cars whereby one can easily get access to them. Somebody is reading the information of the busi­ness and some of these people could be competitors.

It is each board member’s mandate to manage this expectation of confidentiality.

Attending meetings

In order to achieve the business and the mandate of the board, which could be constitutional or by law, they must at­tend board meetings. You realise that in the annual reports of public companies, out of the five possible board meetings, a board member could have attended only one.

During that term, that is not accept­able. What value are you adding to the board?

Not attending board meetings is a failure at the individual board level.

But remember also attending and making no momentous contribution is as good as not attending.

Understanding the busi­ness

It is the responsibility of the board member to gain a thorough understand­ing of the business both at operational and strategic level.

What is the critical asset, key strategic area and technical in­sight of the business? Technical insight gives us competitive leverage in any­thing we are doing.

Strategic key area is that thing which will make us remain in business for some good years to come.

In Zimbabwe, businesses collapse in the second year after its commencement though we are highly entrepreneurial.

It is because these businesses are copy cats. What does the business exist to solve? What will make it long-term?

Conflicts of interest

Conflict of interest is a situation where­by a board member has an interest in the decision before the board. On one hand, he has to work in the interests of the business and on the other in his own interest. For example, if you sit on the procurement board committee and find that may be your close friend or relative has bid for a given contract what are you likely to do.

You have to protect the interests of the company as a Board member and get value for money. But also you want your own to take this contract. How will you take the right decision in that situation? It is very important that you disclose your interest and leave the board.

Guiding the chief executive

Since the board is responsible for recruiting and monitoring the chief executive, they are expected to oversee that office.

It is very disappoint­ing when a board member says they have failed to manage the CEO. In the first place, they are supposed to have been involved in the recruitment pro­cess and providing technical insights.

Proctor Tsamwai Nyemba is a doctoral candidate (Doctor of Philosophy in Applied Forensic Accounting & Fraud Examination). He is a certified board advisor, white collar criminologist, fraud examination expert, business intelligence think-tanker, and forensic accounting & audit expert. This article is in Support of the National Code on Corporate Governance. Feedback: [email protected]