CORPORATE GOVERNANCE BY LESEDI LESETEDI
WHO SHOULD BE BOARD MEMBERS?
In the interest of good corporate governance when nominating members of the Board of Directors it is important to review the entire Board from time to time to get assurance of having the appropriate experience, skills, attributes and competencies needed. The Board of Directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the organisation.
The make-up of the Board should consider members independence and reflect a range of talents, ages, skills, characters, diversity, and expertise, and related industries experience. Board Members should be able to dedicate sufficient time to ensure diligent performance of their duties, including being able to prepare and attend most of the Board and applicable sub-committees meetings.
Therefore to answer the question “Who should be Board Members”, the following should be considered as part of the selection criterion amongst others;
- Proven leadership ability;
- Previous experience serving on Boards;
- Diversity, including but not limited to gender, ethnicity, age and geography;
- Knowledge and experience of the relevant industry;
- Relevant level of responsibility at person’s executive employ;
- Specific skills such as education, finance, audit, legal, international, information technology, diversity awareness, governmental affairs,public relations, marketing, leadership development, disaster relief, e.t.c;
- Right competencies like good interrelations and communication, research orientation, strategic leadership and professionalism;
- Proper integrity and ethical behavior; and
- New school of thoughts and fresh ideas.
An important part of the duty of selecting candidates for Board positions is identifying the needed skills the Board anticipates to provide oversight, direction and leadership for the organisation. Boards need diverse talents to overcome the obstacles a fast-paced and demanding business environment.
Boards often make the mistake of placing too much emphasis on industry-specific skills when selecting new Board Members at the expense of broadening the skills sets by also accommodating experts from outside the industry who will provide a complementary role for an all rounded Board.
Successful Boards maintain a balance of Board Members who are industry experts with those having successful business backgrounds outside the industry. An assessment of each candidate’s credentials should be conducted to decide which candidates best meet the needs of the Board. The selection team should engage potential candidates in wide-ranging discussion and gauge their demeanour as well as their knowledge.
The selection team should place as much emphasis on how the candidate would interact with other Board Members as on the candidate’s credentials. It is also important to have a Board succession plan, which is a critical part for establishing and maintaining good corporate governance. Think in terms of diversity when selecting Board Members.
A diverse Board is more likely to attract better visibility in the community and even gain respect. However, ensure that all potential Board Members have the same understanding of the organisation's mission and vision, despite the diversity among the individuals.
Being an effective Board Member takes time commitment, the ability to work with the whole team, being goal-oriented, and, most importantly, having the interest of the organisation’s mission. The selection team should get to know each candidate, and provide necessary time to gain an understanding of why each wants to join the Board.
Then determine whether each individual can fit in with the rest of the team. Avoid only recruiting well-known community members, or high-income earning individuals, to serve on the Board of Directors since is assumed their names will work for the organisation, but this is often not always the case. It's more important for candidates to have a strong understanding of how a Board of Directors works, as well as an understanding of the needs of the identified organisation and its stakeholders.
Comments are welcome to lmlesetedi@yahoo.com
By: Lesedi Lesetedi
Director at large- Institute of Internal Auditors (IIA) Board of Directors (Global)
Ex-Chairperson- African Federation of Institutes of Internal Auditors (AFIIA)