Low Quality of Ghana’s Boards of Directors Worrying  

The Board of Directors, doesn’t it sound great and important?

Board meeting room

Accra, Ghana, June 11, 2018//-Medium and large companies work mostly under a board of directors but what is a board of directors?

What a board of directors does, who the board of directors are, what makes a board of directors strong or weak and what are the consequences of a strong or weak board of directors?

Let’s start with what a board of directors is supposed to be and do

The board of directors for a corporation is responsible for steering the company through all the challenges a company can run into in the interest of the shareholders or stakeholders, in case of an NGO, and has the overall responsibility for the activities of the company or organization.

A board or board of directors is not responsible for the day-to-day decision-making; the daily decisions are made by the corporation’s executives and managers.

The board is however monitoring the performance of the company and management and planning for the future and future direction of the company.

The board has a fiduciary duty with respect to the shareholders; that is, the board has financial and other responsibilities to keep the corporation running efficiently.

The Primary Duties of a Board of Directors are: Fiduciary responsibility, Mission and Vision and keeping Oversight without participating in day-to-day decision-making.

Now we know what a board is supposed to do, we need to identify what the basics for a strong board of directors are and how to create a strong board.

Board Chairman

Find a senior, experienced chairman who has been a board member or preferable a board chairman before.

Don’t select a chairman based on non-board experience alone.

Select a chairman who can manage internal and external challenges, who is able to negotiate with board members with confidence, authority and skills but also with employees, investors, regulators, bankers, analysts, policy makers, etc.

Board Members

Don’t automatically give board positions to stakeholders, the board should represent your whole market.

Founders of companies are often not the best board members.

Look for capable independent board members who add value to the board as a whole, don’t add board members based upon friendships only.

A Board should be trustworthy, Transparent and Open for Communication        

Keep open communication with senior management of the company and within the board.

A Board should fit the size of the company

Just like a company doesn’t allow employees to overgrow the size of the company, the board should also fit the size of the company.

A Board plans for the future

The best boards are non-homogenize boards with the right mix of skills, abilities, and perspectives to be able to plan for the future of the company.

Composing a Board is a careful plan who to choose and appoint to the board.

Be selective in choosing the right directors, the worst boards are those where everybody always agrees. Add independent and creative out-of-the-box thinking directors. Add directors of different backgrounds from different disciplines.

Change your board members on time

Making decisions with the long term in mind might be well served with long term board members, Better, is adapting to new times, technologies and challenges best served with regular changing of board members who will add different views and keep the board dynamic.

Board meetings should be meaningful

The wrong CEOs fear board meetings, yet the CEO is responsible for the success — or painful failure — of board meetings. The CEO should not be a board member but needs to come to the meeting with a plan of action in place and manage expectations.

The board should not act like a school teacher giving instructions to the CEO, but giving clear and well motivated guidelines .

Subjects of large importance who are taking long to discuss should not be discussed at board meetings but discussed by committee’s who prepare a position to be discussed or voted on.

Every board meeting needs to be useful and meaningful, if there is no need to have a board meeting, don’t have one.

A weak board can destroy the future of a company and in many cases it does.

Boards of Directors in Ghana

I have to say that these “ideal” ideas about boards are not taking any cultural aspect in mind, especially not in our Ghanaian culture where because of cultural reasons doing things differently can help have a better functioning board.

In most cases we don’t need to take the cultural aspects in consideration, so let me start with many of the “mistakes” I often see in Ghana.

Boards of private companies  

Many great entrepreneurs in Ghana create a board of directors for the wrong reasons, like showing others how big and important their company is or giving themselves a more important job title: Chairman of the Board of Directors.

I have seen these companies with complete boards of wives, sons, daughters, in-laws, the company accountant and sometimes one or a few external advisers whose role is always secondary to the founder/chairman of the company who is the absolute ruler of the company.

Boards of large and multinational companies

Mostly a well-chosen board with good variety of skills and views, almost always thinking along European/American business models, unfortunately because of that sometimes with a lack of cultural sensibility.

Local board members try to outpace foreign board members showing how “learnt” and modern they are and are not openly informing foreign board members about local challenges.

Boards of NGOs

Very often, good willing “amateurs”, the quality can be very different, some are part of the best boards I have ever seen in Ghana and abroad, others going down under personal interests of board members and constant discussions on these different ideas and interests exactly because of amateurism.

International NGOs

Are mostly of very low quality, not because of the input (directors) but mostly because of the understanding, inclusivity (or better, non-inclusivity) complete misunderstanding, no understanding or jumping to wrong conclusions of foreign board members and worse, not opening and correctly informing from Ghanaian side, partly because of our culture, partly because of (misplaced) shame and keeping up of appearances.

Boards of Governmental institutions

Boards of governmental institutions are a whole story by itself. Ghana has plenty of these boards and almost all of them have the same things in common.

Only directors of the same political party on the board, always employees including the CEO full members of the board, always representatives of ministries or other organizations on the board, no or low diversity, no or hardly independent free minded and creative thinkers on the board, resulting in a very homogenous board avoiding all political risks and hardly ever thinking in financial interests and the chairman.

As you can see my idea of the quality of a board in Ghana differs from these types of boards but I can safely conclude that most companies, NGO’s and Governmental institutions in Ghana underestimate the functionality and possibilities of having a strong board and mostly boards in Ghana are composed with people having ideas that are not among the first reasons to have a board and to create a strong board.

Overly submissive and defensive thinking of board members, thinking about external consequences is a common problem in our boards.

Last but not least: keeping the “job” is the most important target of many board members.

Let’s hope we can change that in Ghana’s near future because not only are strong boards in companies’ interest but also in the interest of Ghana as a whole.

By Nico van Staalduinen, Executive Director European Business Organistion-Ghana, Member of the Board of Directors SEC, Board Member PSACG

Disclaimer: This article and its comments on African Eye Report and other media are his personal opinions as a Ghanaian of Dutch descent and are not necessarily related to his jobs or institutions he is related to.

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