IMPLEMENTING MWONGOZO: BOARD DYNAMICS AND CULTURE By: Prof. Dr. Halimu Shauri Consultant Sociologist hshauri@yahoo.com

BOARD DYNAMICS AND CULTURE Who has primary responsibility to make board decisions? If a director disagrees with the group decision, what should they do? If the chair has an opinion about an agenda item, what should he/she do? If chair has made his/her mind, what should the directors do? Chair or Directors and why? Chair withholds opinion until all others have spoken Pick one of their own to lead the discussion

Board culture should ensure: Separation of the people from the problem Focus on interests not positions Generate options Use objective criteria to decide (CBA, SWOT, PESTEL etc) These are best strategies for promoting wise decision making What is critical is the problem under discussion, always The interest should always be that of the organization, avoid conflict of interest In problem solving there are many options but each of them should be subjected to a decision analysis (CBA, SWOT, PESTEL etc) Wise decision making is one of the key leadership roles of the board

DIRECTORS AND THE LAW What is the nexus between the board and the law? Why directors and the Law? Which law? What is the nexus between corporate governance and the law? Boards are responsible for an organizational vision, control and must be held to account Law is statutory ie corporations/company’s Act etc CG is greater/diverse than law One (CG) precedes the other (Law) For compliance and that they must account for the decisions and actions of the organization –Organizations think, behave and take action, all of which the board must steer and be ready to account Corporations/Company Acts, Code of conduct and ethics, constitution 2010 Articles 10, 73 and 232

Awareness to all the relevant laws affecting the organization Board members are liable for their acts and omissions due to: Negligence Default Breach of duty Breach of trust Boards are Lucky, but why? Code of conduct and ethics, conflict of interest and whistle blowing policies Policy development Mwongozo approach: Comply or explain Ethics and Integrity: Ethical leadership (Board) and Management by management Establish core values of the organization and ensure adherence Ensure corporate reputation and image through strategy Why lucky? Assisted by a competent and experienced corporation secretary, compositional mix/diversity of skills and expertise, corporate governance training, Mwongozo etc

Compliance with laws, regulations and standards (SOPs) Company Act Leadership and Integrity Act 2012 Public Officers Ethics Act 2003 Constitution 2010 (Article 10, 73 and 232) etc Ethical standards: Before: The business of business was to do business and make profits; Current: The business of business is make profits by doing ethical business

What it is? Why it is done? When is it done? For whom? How is it done? SUCCESSION PLANNING What it is? Why it is done? When is it done? For whom? How is it done?

Staggering of the tenure of board members by appointing authority Mentoring of members Role modelling Apprenticeship Continuous skill and competency enhancement Deliberate succession planning and programming- leadership and governance Deliberate succession plan for board and management

BOARD INDEPENDENCE What is independence? Why independence of a board? What about your board? Are your board members independent? How do you maintain independence?

Separation of roles: Board to be separated from that of management Directors should: Ensure independence in discharging their duties Disclosures of conflict of interests Freedom to seek independence advise on matters of the board within the legal framework Not to have served in the organization for the last five years for SCs Members owe allegiance not to the nominating authority but to the organization Separation of roles: Board to be separated from that of management Chairperson and CEO offices should be occupied by different persons That of CEO and corporation secretary should also be held by different persons

EMERGING ISSUES What are the emerging issues in corporate governance? Why raising concern on emerging issues in corporate governance? How is your organization coping or adapting to these issues? What recommendations do you give to ameliorate the situation? Emerging issues because of dynamism of organizations, management, boards and even the environment

CONFLICT MANAGEMENT What is conflict? What types of conflicts does the organization face? What is conflict management? How do we manage conflicts?

Conflict management register Declaration of real or perceived conflicts of interests Excuse yourself in decisions, actions or discussions with conflict of interest Restrain from influencing any decision, action or discussion with conflict of interest and enploy: Policy on conflict management Strong CSR policy and activities (What % as an emerging issue?) Whistle blowing policy Safeguard rights of shareholders/public Effective, efficient and expeditious dispute resolution mechanisms (shareholders/ employees/board members) Involve stakeholders in decisions affecting them Policy to manage stakeholders relationships Alternative Dispute Resolution (ADR)

GIFT MANAGEMENT Gifts and culture (African and organizational) Gifts and Directors: Are directors accepted to accept gifts? To what extent/value? How do we curb gift abuse? Gift policy

KNOWLEDGE MANAGEMENT AND ICT Research based decision making and actions How does your board generate and manage knowledge? Why knowledge management? How is ICT important for knowledge management? How useful is ICT to the Board? How can the Board manage ICT related risks? what would ICT Risk management entail?

Key issues in ICT and knowledge management include: Generation of knowledge and availability/accessibility of ICT Enhancement of capacity for members to use ICT in the organization and the board Employing ICT and Knowledge into Governance issues What are the emerging issues in knowledge management and ICT? Management of ICT