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”, a range of key industry experts shed light on the changing dynamics of the Board. The event was presided over by the Managing Director/CEO, FITC Chizor Malize and had top-notch speakers with Aishah Ahmad, CFA The Board Chairman, FITC Deputy Governor Financial System Stability Central Bank of Nigeria (CBN), giving the keynote address.
Ibukun Awosika, Chairman, Board of Directors, First Bank of Nigeria, Prof. Kingsley Moghalu, President, Institute for Governance and Economic Transformation (IGET) and Former Deputy Governor, Central Bank of Nigeria, and Dr Oladimeji Alo, MD/CEO Excel Professional Services, were central to the success of the program through the experience sharing sessions.
Other speakers include Alison Dillon Kibirige, Consultant Sub-saharan Africa IFC Global Corporate Governance Forum, Dr 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 kicked off by 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.” It is for this reason that FITC set up this 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.’’
Ahmad, while giving the keynote address titled “Leveraging Board dynamics for competitive advantage” spoke about the nature of crisis to be periods 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.”
In periods such as this, businesses are required to come up with strategies not just to survive but also stay ahead of the competition. She explained, “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.”
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.”
Ibukun Awosika in the experience sharing session, explained that a necessary action that her company practices is to have special strategy sessions. She said, “The purposes 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 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.
Prof. Kingsley 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.” In response to a question by the Managing Director/CEO, FITC Chizor Malize, on how to ensure that there is trust between Board and management just so that the common good and shared vision is achieved, Prof. Kingsley 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 “Indeed 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 then went ahead to share 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.
Dr Oladimeji Alo, who was also one of the speakers at the experience sharing session shared that while the crisis lasts, be it regulatory induced, industry-specific or a global crisis like the Covid-19, the Board needs to keep its focus on the longer term. While management is preoccupied with operational issues, the Board must look beyond that and ensure that the business is on track with the future.
Over the course of the prepared sessions, Ms Alison Dillon Kibirige in her presentation titled “Board/ Management Dynamics: Imperative for Effective Governance” spoke about the governance framework of companies and how it is reflective of their success or otherwise. She noted that in times of crisis, the Board’s role cuts across becoming more involved in the affairs of the company increased focus on business resilience, as well as the clarity of withdrawal strategy following the crisis.
Dr Edward Olowo-Okere also spoke about the role of the Board in terms of developing strategic direction and performance objectives of long-term value creation for the benefit of all stakeholders. He explained that the Board’s role during a crisis is to provide vital support and oversight to the management, communicate effectively, and keep an eye on the future. For the future and sustainability of companies mainly in these periods, he suggests the reengineering and planning of the ‘new normal’ and this requires that new opportunities are found. He also indicated that Board members should conduct post-crisis deep dives on their crisis management plans and structures.
Austin Okere spoke on “Developing a Sustainable Crisis-Resistant Culture, Strategy and Technology.” He talked about the need for the Board to follow disruptive trends, be conscious of the environment and social issues, and should be diversified in such a way that representation in terms of age and gender is adequately in place. He also spoke about the Board having optimal team dynamics in terms of team communication, team decision making speed, risk appetite for decision making, team management styles, team balance, and team charter.
Benson Uwheru gave the final presentation titled “Strengthening Risk Oversight in a crisis.” The current pandemic has led to global health, and economic crisis will have drastic short- and long-term impacts on organisations’ business models. It is for this reason that Boards must adopt a stakeholder approach to navigating the current business and economic realities to build long term value in a post-COVID-19 era. He explained further, noting that “The collective experience and wisdom of Board members is critical in shaping how their organisations respond to the pandemic.”
On feedback from Directors who attended the Programme, Dr Ije Jidenma, Independent Non-Executive Director First Bank of Nigeria, expressed that the programme was well designed and delivered. According to her, FITC did very well by having a brilliant, knowledgeable and experienced faculty.
Mr Bayo Fakorede, Managing Director, STACO Insurance, found the programme fantastic and insightful. ‘’FITC has done great by bringing up this topical issue at this critical period of largely disrupted economic terrain due to the COVID-19 pandemic. The faculty used to deliver the papers were fantastic, and I must say it can never be better. Kudos to the FITC team.’
The event, which was organised by FITC, was attended by Directors, Non-Executive Directors, Board Members of financial and non-financial institutions, as well as public and private sectors organisations across diverse sectors. The knowledge professional service firm has, since inception, provided unmatched learning support to its clients and will continue to do so even with the changing times.
