Author: Dr. Justine Chinoperekweyi
Boards are fundamental to organizational effectiveness. This is primarily because of the strategic thinking and strategic leadership roles that exceptional boards execute with clarity. Mahatma Ghandi said “A small body of determined spirits fired up by an unquenchable faith in their mission can alter the course of history.” This quote brings into context the need for board members to be mission-critical, passionate, and results focused. Exceptional boards give organizations corporate direction, dignity and discipline; thereby creating high-value organizations. However, the main concern of corporate governance is the effective functioning of the directors of an entity. Though the concepts of ‘strategy, strategic, strategic thinking and strategic leadership’ are discussed in most forums, there seem to be a mismatch between manner in which they are portrayed and the ensuing results. Of course, these are interesting concepts for people to be associated with because of the labels attached to them- power tools, magical, transforming, results-oriented and so on.
There is extensive literature focusing on the main roles of corporate boards and some essential roles identified by literature include steward of the organization, model of corporate values and core values, custodian of strong governance, strategist, risk and scenario planner, public face and market maker, custodian of capital markets and global advocate. These are power-roles, transforming and magical roles; as it seems success is guaranteed once we have these roles. These roles encompass board members acting as sources of advice and counsel to organizations. Interestingly, rather than mere chattering about these roles, exceptional boards takes serious the strategic thinking and strategic leadership roles. The King Report identifies the following board roles:
• to define the purpose of the company
• to define the values by which the company will perform its daily duties
• to identify the stakeholders relevant to the company
• to develop a strategy combining these factors
• to ensure implementation of the strategy
A review of the King Report roles indicates that exceptional boards have a dual mandate: advisory and oversight of the organization and all its affairs. There are numerous factors to determine the level of board exceptionality. My banking corporate governance doctoral study with UNILUS identified the following indicators of board exceptionality: level of interaction with management, board of directors’ business savvy & stakeholder focus, fulfilling expected board functions, pro-active risk management, upholding to ethical standards, and inspiring a shared vision. Other equally important determinants of board exceptionality include board members’ competencies & experience, board size, and frequency of board meeting. The latter roles are extensively captured in corporate governance codes and other Corporate Governance Guiding Frameworks.
Due to the broadened understanding of the purpose of corporations, the focus on board roles has been shifting towards a hybrid corporate governance model that prides in both the pedantic rules-based model and the principles based model. The hybrid or enterprise-wide model also considers the performance and conformance governance dimensions while integrating nascent developments such as Artificial Intelligence. This systems thinking perspective has been necessitated by the increasing reports of corporate governance deficiencies in most jurisdictions. The blending of universals (know-that) and particulars (know-how) in corporate governance discussions and practice is therefore essential to enhance corporate performance (as measured using economic, environmental, social and governance metrics). What are some of the practices to enhance the performance of corporate boards? I use the Board & CEO Vowels of Organizational Effectiveness to answer this question.
• Aspire to a shared vision and Active Monitoring – the Board should demonstrate commitment to the organization vision and actively monitor the CEO and executive team members.
• Environmental scanning and Enterprising – this focuses at enhancing organization ambidexterity (exploration and exploitation). The Board should always scan the operating environment to see beyond the horizon. The directors should also demonstrate acute entrepreneurial proclivity. Enhancing exploration and exploitation competencies of directors leads to informed decision making.
• Integrate and Implement – the Board should strive to ensure system coherence through integrating all the business units. There should also be increased commitment to the implementation of an organization’s plans.
• Own and Oversee – assuming Board roles is associated with committing to a sense of ownership and oversight responsibilities.
• Uphold ethical values – Board Members should commit to duty of care, honesty, candor and loyalty. Exceptional boards uphold to acceptable values and oversee the operations of the business.
All the above practices demand strategic, contextual and change intelligences by all members of the leadership alliance.
As a pivot between management team and shareholders, Boards are a development imperative in any organization. Based on their experience, expertise and skills; directors provide technical assistance to C-suite and management team. In the book ‘Corporate Governance in Banking: Nuggets from Canada, Georgia, Germany, U.K., and Zimbabwe’; I pointed out that boards champion organizational transformation, challenge the organization’s basic assumptions and help to foster a culture of exploitation and experimentation in a VUCA environment.
The directorship title has been abused in recent times due to the increasing ‘entrepreneurship chattering’ or probably a misunderstanding or misinterpretation of the notion that everyone is a leader. The need to redefine corporate directorship and reassess our directorship cannot be overemphasized. There is need to emphasize conversations that pride in the essence and principles of corporate directorship rather than the wide & wild spreading view of such noble function as a mere title. Good directorship aces adaptability, prides in strategic thinking and strategic leadership, creates engaging work cultures, and leads change. I first encountered the concept of directorship when I was in Senior High School studying Management of Business (MOB). During the time we viewed Corporate Directors as noble man and women steering organizations and developing people – it was not a function of the ordinary. Board meetings were valuable and not mere meetings. Today the narrative of corporate directorship has changed; it’s now a tag on common man and women. Board meetings are seemingly becoming ordinary discussion forums for well-dressed man and women enjoying coffee and some snacks.
Boards are a development imperative. There is need for scholars, educators and practitioners to search the long lost link of strategic thinking and strategic leadership in corporate board rooms. Good board members exhibit passion, commitment and vision; and they articulate these clearly.
Assess your board involvement. Lead!
Dr. Justine Chinoperekweyi is the Director: Academics & Programs at the Centre for Organization Leadership and Development (COLD). He also serves as President of OLDN and Editor-in-Chief of the Organization Leadership and Development Quarterly (OLDQ). Dr. Justine also works as Academic Director in UAE. He holds numerous other international positions aligned to OD, Leadership and Governance. Visit www.drjustine.net. Can be reached at firstname.lastname@example.org