Various directors and chairpersons attended an enlightening breakfast session at Strathmore Business School on Thursday 11th April 2013 aimed at tackling board dynamics and shared their expereinces with fellow directors and chairpersons during a breakfast session for directors dubbed How Effective is Your Board.’
The enlightening breakfast session which was sponsored by the Institute of Directors Kenya (IOD), a professional organisation of individual Corporate Directors and senior managers, began with a presentation from Dr. Robert Mudida Senior Lecturer, SBS, who highlighted the changing political and economic environment in Africa with a focus on the growth of the continent which now has a fast-growing middle class. This growth, he noted has been widespread across all sectors and has been faster than that of East Asia including Japan. This has been attributed to the improved macroeconomic conditions, decrease in public debt, increased labour productivity and other factors.
The breakfast event also included a panel session comprising of Dr. Mudida, Dr. Martin Oduor-Otieno – Former CEO, KCB Bank Group, Rose Lumumba Director, Capital Markets Authority and was moderated by Dr. George Njenga – Dean, Strathmore Business School.
It was noted that organisations have visions and goals, which need to be met efficiently and effectively through well planned and executed strategies. The board has the mandate to oversee the organisation and ensure that it operates in the best interest of its stakeholders.
Being in a board of any organisation is a challenge especially with the intricacies of the current corporate structures and flexible markets. Rose stated that organisations must deliver and the responsibility is upon directors to ensure this. The board should therefore be trained on how to carry out their roles, duties and responsibilities. Training the board is becoming more crucial as the boards are now being held accountable for the failure and or success of organisations.
Indeed it is true that effective boards add real value to organisations and for a board to be effective, a healthy relationship between the CEO and board members needs to thrive. Dr. Martin Oduor-Otieno stated that the relationship between the chairman and the CEO is a key relationship which should not be adversarial. The chairman should create an atmosphere of trust, transparency and respect to enable the board to thrive. Building the right relationship however takes time and effort.
Board evaluations in now common practice as boards seek ways to improve their organisations. Evaluations should be carried out to enable the board to become increasingly strategic and practice better governance in a bid to ensure continuous improvement in their performance. It would be advisable to use a third parties to evaluate the board as they will be able to delve into issues and strategize on circumventing them, said Dr. Oduor-Otieno.
The issue of fewer women sitting on boards in Kenya was raised, to which Rose affirmed that the Institute of Directors has compiled a list of women directors who have been trained on corporate governance to assist those interested in hiring board members.