Creating the Future: The Simple Antidote to Running a Successful Business

A strong and effective Board of Directors is an invaluable asset, one that is a key to success in creating the wealth envisioned by the entrepreneurs and business owners.– Yazad Patel, CEO of BoardTitans.

In today’s competitive corporate world, there is a wide spread recognition that only organizations with strong governance structure can thrive. However this concept is still relatively novel in many parts of the world where organizations are just recently beginning to transition from “one-man businesses” to sustainable institutions that can outlive their founders. Although many companies in Nigeria are undergoing this transition, as their founders and leaders receive more trainings and exposure, the governance systems in most organizations remain underdeveloped.

Read Professor Philippe Haspeslagh review of the book “Get on Board”, the second in a series of books on leadership published by LEAP Africa. 

Excellence in corporate governance is no longer optional in today’s world. This reality is driven by both the emerging standards of international capital markets and by societal expectations for better corporate citizenship. Becoming recognized as a well-governed company may not only lower one’s cost of capital, it may also allow one to sleep better.

The effectiveness of an organization’s Board of Directors remains the key to such advances. Improving this effectiveness is less an issue of Board structure or rules, but more one of process and culture. Boards exist to provide oversight to a company; they also add value and help the management team take the company forward. However, this is impossible if the owners of the business and the CEO are not aware of, or convinced of, the tremendous benefits that an active Board can provide.

In this clear and concise book, LEAP Africa brings the case for Boards to Nigeria, for private entrepreneurs and listed companies alike. There is definitely a need: almost half of the Nigerian enterprises surveyed by LEAP Africa still see a Board of Directors as a constraint and intrusion they can do without. With practical case examples, the book demonstrates how the advice and counsel of external Directors can help companies develop, enhance their credibility to the outside world, and avoid certain risks. Perhaps the most compelling argument that the book makes, concerns the crucial roles of Boards in the continuity and growth of firms beyond their founders: in most Nigerian companies that succeeded a generational transition; a functional Board was a key factor.

The book is eminently practical. It provides guidance for the selection of a Board of appropriate size, with the right set of complementary skills and experience. It does not shy away from the question of whether the roles of Chairman and CEO are best divided. The book also provides useful checklists on how to structure the Board and make it function effectively – from establishing committees to preparing for meetings, setting their agenda, and successfully running them. For Directors, the book suggests valuable questions they should ask before joining a Board, and offers perspectives on how to self-assess their performance when they are on Board.

For those who want to make the most of their existing Boards, this book will serve as a valuable guide. It details important and pragmatic steps to shape the right Board culture and processes. It’s greatest value however is to provide food for thought for those who still think they can dispense with an idea whose time, clearly has come.

Frequently Stated Reasons for the Absence of Board of Directors

1.“I don’t see any big deal in having a Board”

Many entrepreneurs simply do not understand what role a Board should play in their organizations; therefore, they have no incentive to set one up.

2. “I’ve been meaning to set up a Board. I have just never gotten round to it”

Some entrepreneurs admit the need for a Board but procrastinate indefinitely. This situation could be traced back to limited knowledge; most likely the entrepreneur does not fully understand all the benefits that the organization is missing due to the lack of a Board, or may not know how to set up one.

3. “I will set up a Board when my organization gets bigger”

Even small organizations stand to benefit from a proper governance structure. At the inception stage, a board of advisers can be useful pending the formation of an actual Board.

4. “I don’t want outsiders to control my business”

This entrepreneur fails to recognize that seeking to maintain complete control over her business will hinder its prospects for growth and sustainability.

5. “I’ve been thinking of setting up a Board but it’s just too stressful”

Although instituting a Board requires a significant amount of attention, the rewards of a high impact Board far outweigh the investment. [In the Book – Read detailed directions on establishing Board.]

6. “Having a Board will be too expensive for my organization”

Sitting allowances and Directors fees do not have to be exorbitant. {In the Book – Read suggestions for other creative incentives to offer Directors.]

7. “I don’t know anyone who can sit on my Board”

Many entrepreneurs have the misconception that their Board should be limited to only rich or prominent people. They fail to see the vast network of committed experts who share their values and would be honored to sit on their Boards. [In the Book – Read suggestions on recruiting Directors.]

8. “Oh yes, I have a Board: I discuss the business with my wife and kids around the dinner table from time to time”

Family updates are quite different from Board meetings. It is unlikely that this entrepreneurs enjoy the quality of expert advice, inquiry, oversight and objectivity from his family that he would receive from a formal Board.

9. “I already have a strong management team. I don’t need a Board”

A Board has different roles and responsibilities from a management team. While it is essential to have a management team, an organization still requires the higher-level direction and oversight that a Board offers. [In the Book – The key difference between a Director and a Manager]

Do you fall into any of these categories or are there other reasons you would like to share with us? Please type your comments below.

Get on Board is available at the following bookstores in Lagos:

  • Debonair Bookstore 294, Herbert Macaulay Street,Sabo Yaba.
  • B & B Bookshops 107a, Adeniyi Jones Avenue,Ikeja.
  • CIBN Bookshops Plc, 19, Adeola Hopewell,Lagos.
  • NIIA Bookshops 13/15, Kofo Abayomi Street,Victoria Island,Lagos.
  • Terra Kulture Plot 1376, Savage, Off Ahmadu Bello Way,Victoria Island,Lagos.
  • CSS Bookshop, Bookshop House,50/52,Broad Street,Lagos Island.
  • Options Book House 142, Oyo Road, Ojo, Ibadan North, Oyo State.

Call 012706542 or send an email to info@leapafrica.org/ aasaba@leapafrica.org for more information.

 

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