In the modern world of business, one of the most critical determinants of success or failure is the Board of Directors. The Board is responsible for setting strategic goals for the organisation, protecting shareholders’ interests, establishing policies for management, and more. In periods of crisis where a wide range of events could threaten organisations, the onus falls on Board members to strengthen their governance functions, working together with the management to ensure the survival and resilience of the company. Consequently, there is a need to be proactive, and the first step to this is in garnering the required level of skill and knowledge to make effective board decisions.
In a two-day event spanning the 23rd and 24th of July organised by FITC titled “Building effective Board dynamics in a time of crisis”, key industry experts shed light on the changing dynamics of the Board.
They include Aishah Ahmad, Board chairman, FITC, and CBN deputy governor, Financial System Stability, who gave the keynote address.
Others are Ibukun Awosika, chairman, Board of Directors, First Bank of Nigeria, Kingsley Moghalu, president, Institute for Governance and Economic Transformation (IGET) and former CBN deputy governor, and Oladimeji Alo, MD/CEO, Excel Professional Services, who were central to the success of the programme through the experience-sharing sessions.
It also featured Alison Dillon Kibirige, consultant, sub-Saharan Africa, IFC Global Corporate Governance Forum, Edward Olowo-Okere, global director, Governance Global Practice at the World Bank Group, Austin Okere, founder and Entrepreneur-in-Residence at the Ausso Leadership Academy, and Benson Uwheru, partner, Banking and Capital Markets Sector, West Africa, EY.
The event was presided over by the managing director/CEO, FITC, Chizor Malize, who shared that the world is in a period of severe uncertainty owing mainly to the unprecedented Covid-19 pandemic, as well as a series of economic challenges that have been birthed by virtue of it.
“Organisations are having new challenges to deal with, but the success of any organisation lies enormously with the Board and Board leaders,” Malize said, adding that it was for that reason that FITC set up the event.
‘’FITC continues to design and deliver well researched and valuable knowledge content that equips Board Members to play their role effectively with sustainable success,” Malize said.
In a keynote aishah address titled “Leveraging Board dynamics for competitive advantage”, Ahmad said crisis is a period of significant change and uncertainty for organisations.
“A crisis is a period of great change and uncertainty for an organisation. It usually brings seismic shifts in the industry landscape, disruption of business models, rebalancing of competitive positioning and the exit and subsequent emergence of new players,” Ahmad said.
In such periods, businesses are required to come up with strategies not just to survive but also stay ahead of the competition.
“To remain competitive beyond the crisis, organisations with significant business model disruption must move the Board’s overall effectiveness beyond oversight and maximising shareholder value, to actively driving growth, innovation and value creation,” she said.
Speaking on how FITC has put these systems in place, she said, “As the company approached its 40th year of existence the business and financial landscape in which it was birthed was markedly different from the operational context it found itself. To remain relevant, it had to change direction. The Board took a more active business advisory role in the selection of the CEO, determining the strategic focus and direction and engagements with stakeholders and potential customers to originate business.”
Awosika in the experience sharing session explained that a necessary action that her company practices is to have special strategy sessions.
“The purpose of this is for the Board and management to sit together, review the strategy we had planned for 2020, review it in line with the reality of the Covid-19 environment, evaluate our response so far, evaluate the critical changes that have happened, and decide together what are the key things that we must do to achieve whatever goals we believe are still achievable within the year in the context of the new environment,” she said.
She emphasised the need for the Board and the management to work as a team with one goal in mind, facing the reality of what the situation is and not living in denial of it, accepting what can be and what cannot be, reviewing the things that change permanently and the things that are still viable, looking at what the new opportunities are within the context of the crisis itself, the tools available or unavailable to respond going forward, as well as the things that have a much longer impact on the company as a going concern.
Moghalu, in the same session, noted that in a time of crisis, a Board should weigh its options for decisions and not just rush into what seems to be an obvious choice especially at a time like this.
“Everybody needs to know the objective and the members of the Board have to agree on what that objective is. There must be a weighing of options because if you rush into what might look like an obvious choice, the Board could make a mistake,” he said.
In response to a question by Malize on how to ensure that there is trust between Board and management just so that the common good and shared vision is achieved, Moghalu extensively spoke about how unified vision, transparency and constant communication is vital in building trust.
Bola Adesola, during her experience sharing session, explained that even though there are situations that the Board can prepare for, there are also Black Swan events like the Covid-19 pandemic “which just landed on the world like a bolt from the blue; sudden, unexplained, very severe, and no immediate remedy.”
Speaking on how Boards respond to this crisis, she explained that a critical role of the Board is to be strategically aligned to build business resilience.
“Yet, Boards need to be flexible and open in communication style and ensuring that trust is solid,” she said.
She shared her experience from her over 30 years in banking where she has lived through a series of crisis’ from externally triggered events such as the global financial crisis of the 1980s, to the ‘Soludo-Solution” on bank recapitalisation in 2004, the 2012 fuel subsidy removal to the Ebola epidemic and more.
