The Sunday Mail
THEY say to be forewarned is to be forearmed.
BoardroomTalk
Dr Proctor Nyemba
There are common mistakes that board members make, but these can be avoided.
As a seasoned executive and board member, I have witnessed first-hand the challenges and pitfalls that boards of directors face.
Despite having best intentions, boards often make mistakes that can negatively impact their organisations’ success. Below are some of the most common mistakes boards make and how to avoid them.
Failing to define clear objectives
A board must have a clear understanding of the organisation’s mission, vision and strategic goals. Without this clarity, the board’s decisions and actions can lack direction and cohesion.
Lack of diversity
Boards that lack diversity in their membership may miss out on valuable perspectives and insights. Diverse boards bring a broader range of skills, experiences and backgrounds to the table, which can lead to better decision-making.
Overstepping boundaries
While boards are responsible for providing guidance and oversight, they must avoid micromanaging the organisation’s day-to-day operations. Overstepping boundaries can undermine the chief executive officer (CEO) and create tension within the organisation.
Neglecting succession planning
Boards must be proactive in planning for leadership transitions. Without a plan in place, organisations can struggle to maintain stability and continuity during periods of change.
Ignoring risk management
Boards must identify and manage potential risks to the organisation. These include financial, legal and reputational risks. Ignoring risk management can lead to significant problems down the road.
Lack of transparency
Boards must be transparent in their decision-making and communicate openly with stakeholders. Lack of transparency can erode trust and undermine the organisation’s credibility.
Failing to evaluate performance
Boards must regularly evaluate their own performance, as well as that of the CEO and other executives. Without this evaluation, the board may not be able to identify areas for improvement and adjust course as needed.
Conflicts of interest
Boards must be vigilant in identifying and managing conflicts of interest among members and executives. Failure to do so can result in accusations of impropriety and damage the organisation’s reputation.
Ineffective communication
Effective communication is essential for the success of any board. Boards must ensure communication channels are clear and that all members have the opportunity to contribute and provide feedback. Ineffective communication can lead to misunderstandings and missed opportunities.
Lack of engagement
Board members must be actively engaged in the organisation’s affairs. This includes attending meetings, staying informed about important developments and actively participating in decision-making.
Short-term thinking
Boards must avoid short-term thinking and focus on the long-term success of the organisation. This means considering the organisation’s sustainability and growth prospects, rather than just immediate financial gains.
Not seeking outside expertise
Boards must be open to seeking outside expertise when needed. This includes consulting industry experts, hiring consultants or seeking advice from other organisations. Failure to seek outside expertise can limit the board’s ability to make informed decisions.
In conclusion, boards of directors play a critical role in the success of organisations.
Avoiding these common mistakes can help boards operate more effectively and contribute to the long-term success of the organisation.
By defining clear objectives, embracing diversity, avoiding micromanagement, planning for succession, managing risks, promoting transparency, evaluating performance, managing conflicts of interest, communicating effectively, staying engaged, focusing on long-term success and seeking outside expertise, boards can avoid common pitfalls and help their organisations thrive.
Although I have seen other board members make the same mistakes, most do not make them intentionally.
Thankfully, they are simple slip-ups with simple solutions.
Being self-aware will help you recognise when you are about to make one of these mistakes (or if you have done so already) and work towards positively changing your behaviour.
Dr Proctor Nyemba helps board members and executives understand their role in governance so they can succeed in the boardroom. For comments and feedback, please send to: [email protected]/ Call 0772469893
