The Fresh Eye of Corporate Governance

As the Managing Director of an organization, are you prepared to answer these questions: How are key decisions made? Who are the people with essential knowledge and expertise, and how do you plan succession for these key risk positions? How do you manage risks? How can you see what is happening with the company? How can stakeholders and partners be sure the information provided about our company is factual? These are some of the questions that speak to Corporate Governance in an organization.  

Corporate governance is all about proper roles and responsibilities. This is true for technology companies and for all kinds of companies. In technology companies it is particularly important for one key reason. The rate of growth is tremendous, owing to competition and the dynamic technology space.

The corporate environment has become more and more complex: organizations are increasingly globalized; technology is at the forefront of everything being done; the workforce is dynamic. In this environment, the risks become more evident. It is within this context that Corporate Governance emerges, the need to have a Board of Directors to be the “Fresh Eye” for the Executive. I refer to a Board of Directors as “fresh eyes” simply because they can see things that we as management do not. 

Whether small or medium-sized, any company can benefit from the concepts of governance for structuring a management process that integrates operations with strategy. Every organization needs management, direction, and a monitoring system for its operability. Research and empirical evidence show that good governance improves business performance and increases the chances of a company’s long-term survival.

The PWC 2021 Board of Directors Survey results reports that Directors spend about 150 – 250 hours a year discussing an agenda packed with board duties around Talent management 34%; Strategy 31%; Crisis management 29% and Succession planning 28%. Start with oversight, a role of the board that, most directors will agree, is no longer its sole function. Directors are now required to engage more deeply in strategy, digital matters, Mergers and acquisitions, risk, talent, IT, and even marketing.

Governance revolves around transparency and a balance – it is the instrument that provides a balance between the power structure and the operational structure of the corporation. The economy is fueled through well-governed organizations, and hence good corporate governance must be more than just a catchphrase. It’s an imperative. I subscribe to the board principle of Eyes in, Fingers Out. This means the Board’s function is not to run the company but to provide oversight to manage and set policy. The board’s role is to govern and the management’s role is to manage. 

At Adrian, we embarked on our corporate governance journey in 2016 with the purpose to build transparency and accountability for the business. The business has to date benefited from the appointed Board of Directors whose oversight role has led to our business growth. We pride ourselves to have Engineer Patrick Obath at the helm as our Chairman of the Board who has manifested through being a stickler for good corporate governance, promotion of diversity, and a champion for sustainability. Eng. Obath remains pivotal in his fiduciary role to ensure we remain on course in all matters of Governance. He has taken the additional role of not just a Board Chairman but also a mentor. I make specific reference to congratulate Engineer Obath for being nominated amongst the Top 25 Most Influential Chair of Boards impacting Business. https://www.theknowledgewarehouseke.com/top-25-most-influential-chair-of-board-impacting-business-2022-17/

I share nuggets on how ‘Fresh Eyes’ give value to an organization through the ever-changing dynamic business environment:

1.    They have a different perspective on issues. Board members need to be able to see all sides of a problem and all the implications it can have on the organization. As experts, they inject a fresh lease of thinking into Management which propels the business to the next level.

2.    They have experiences and views from other industries that may have already experienced and solved the problems or issues at hand. Many a time more established organizations have already dealt with certain challenges faced by newer organizations, reference to the life cycle of a company. Board of Directors having expertise in a diversity of business sectors bring that knowledge and expertise to support management to help expedite the creation of effective solutions.

3.    They have a rich network that the business can tap from: the Board of Directors are many a time individual who boasts of a rich network that the management finds valuable to utilize and harness.

4.    They will ask new and different questions to stimulate the management decision-making process. The Board of Directors will ask questions as a way to gain perspective, which will get management to relook, reassess, and have “ah-ha” moments related to the situation, which is vital as part of decision making.

5.   They can bring a new understanding of a subject that management does not have. Directors usually have a specialty (i.e. industry knowledge or skill set) they leverage to educate the management. The Board helps management to understand their responsibilities and their exposure when they do not have a proper plan in place for the company.