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What directors must do to keep their organisations healthy

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In most organisations board of directors are called to account even if it is known that most of them do not engage in day to day running of the organization.  It is against this backdrop that they should be vigilant and diligent when investing in their organisations work force as more often they will be caught in the web whenever thing go wrong.

The need to invest in the best manpower is paramount this should be applied even in running the country. Two weeks ago I had the privilege of facilitating a Directors Programme organized by the Kenya Institute of Management with Mike Eldon. It was one of the most captivating and engaging trainings I have ever facilitated in the recent past.

The directors who were recently appointed by President Uhuru in different portfolios had so much energy and at the same time motivated to do their work. It is in this forum that questions arose of board members non-involvement in running of organisations whereas they are expected to take the burden whenever there is a crisis which they themselves do not necessarily create.




The forum also bought to fore the mistrust and suspicions that runs between the Board of Directors and management, which deter the two parties from harnessing their energy for the wellbeing of the organization.

In Kenya, boards have more often subsisted in dread with the senior management especially the CEO, and in equal measure the CEO looks at the board as a sacking entity and thus going to lengths to curtail, conceal and at times blatantly hide vital information from directors.

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The frosty relationships have frequently positioned junior employees on the receiving end whenever they are deemed to be harbouring whatever kind of relationships with the board as they are often looked upon as conspirators or corporate moles that are strategically positioned in the company to snitch on their seniors.

It is thus not astounding that some Company Secretaries and heads of legal departments have often been used by senior management to slow down the Board in cases where the CEO is not the Board Secretary. It also emerged that in some cases the management phobia leads to extreme measures whereby they concentrate much on insulating their positions and by this creating a firewall between them and the directors instead of working in the organisation core mandate, which end up plummeting.

In extreme cases the suspicion often takes centre stage as the management result to underhand and juvenile means whenever there are board meetings thus at times include deliberate delays of conveying the meeting agendas and down playing of weighty issues and instead projecting trivial issues as the main agendas of such meetings.

In such scenarios directors end up engaging in trifles and needless showdowns in certain cases stooping to agendas like “Which roof caved in yesterday? When the CEO earned his Harvard MBA and how tough a CEO’s job is”.

In retaliation these of tug wars have seen board members reject, limit or fail to approve important charges in the organisation.

Every organization should endeavour to have an effective board composed of high quality individuals with knowledge, skills, experience and attitudes. Gender, age and ethnic balance should also be a factor when choosing or appointing board members.

The directors must be dependable and totally focused on the organisation’s products and clients, this should include the effectiveness of the management and staff. Directors are bound by fiduciary duty to ensure they operate in the business’ best interests. Specifically, a board of directors has the duty of care and the duty of loyalty to the company it governs.

Board members are the fiduciaries who steer the organisation towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies, as well as making sure the organisation has adequate resources to advance its mission. The board members are therefore meant to provide foresight, oversight, and insight. And because they are not meant to manage day-to-day operations one of its supreme roles is to hire a brilliant CEO to run the management activities.

In their obligation, board members are required to stay objective, selfless, responsible, honest, trustworthy and efficient. The directors should therefore act, as stewards of public trust, must always act for the good of the organisation, rather than for the benefit of themselves.

They need to exercise reasonable care in all decision making, without placing the organisation under unnecessary jeopardy. To ensure the smooth running of the organization and to create healthy culture and values the management should; avoid conflicts of interests; act in the interest of the organisation rather than in the interest of board members; provide oversight to assure that the organization’s business is transacted legally; and make decisions to protect the assets of the nonprofit organisation.



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GODFREY ETTAH
GODFREY ETTAHhttp://www.businesstoday.co.ke
Godfrey Ettah is a Management Consultant based in Nairobi. Twitter: @EGtwits Email: [email protected]
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