Executives who serve on boards should possess more skills than the management of a company.
In a highly anticipated session at CHRO Day, Busa president Bonang Mohale, Drayton Glendower’s managing partner Moula Mokhobo-Amegashie, and Institute of Directors Southern Africa CEO Parmi Natesan discussed the board reshuffle.
The three panellists highlighted succession planning, skills development and key competencies board members should have as the fundamental factors that contribute to the success of any organisation.
Moula shared that Covid-19 had changed the way of transacting. “We’ve moved from physical transactions to virtual transactions. We reach our candidates, clients, consumers and our communities virtually and boards have not been spared from that change in how they conduct their work.”
Boards now have to focus on certain skills and capabilities, particularly the technological type.
“That’s had an impact on the profile, age, gender and general traditional profile of board members. If you are looking at cybersecurity and some of the risks that companies now have to look at from a technical perspective, you are requiring board members that are younger, less grey hairs, probably a lot less experienced in terms of a traditional linear career, but who have a very strong skill set that’s going to support the board, support the executive in this changing environment of transacting from physical to virtual.”
Parmi emphasised the importance of succession planning: “The last thing you need when an organisation is on the growth trajectory is to have a leadership vacuum.” As critical as succession planning is, Parmi said it was often neglected because it is uncomfortable.
“Oftentimes you find that chairs and CEOs themselves see succession planning as a threat.”
She said there were two parts to succession planning if done well. These are: a medium-term plan – where in five years’ time, when a chairman or CEO’s term ends or they resign, the company knows who will succeed them.
The second part is the short-term plan in cases where a CEO or chairperson dies. “You need to talk about it and decide if something were to happen to your chairman or CEO tomorrow, who would step in. Everyone needs to know what the plan is. There can’t be panic when something does happen and nobody knows what’s going to happen.”
Bonang touched on excellence and said leaders should constantly ask themselves if they are continuously learning. “The day you feel, even as a CEO, that ‘I’m no longer learning’, even after three years – that’s an indication for you to leave it to younger, cleverer, more educated and highly productive people,” he said.
According to Moula, it has become trendy for executives to want to serve on boards. “For you to sit on the board, you need to be more experienced than the management of that company. You should come with a tool kit that has a lot of tools in it that you are going to use to support and guide the management team. If you have less skills than the management, then what’s your value add to that particular board?”
Parmi revealed that there are challenges in private and public sectors on how boards are appointed.
In the public sector, Moula said there is little consideration of skill and competence, while in the private sector, “there is not enough engagement from shareholders on who they are voting for”.
“We need to be seeing people being appointed and being assessed against the competencies that are required to serve as a director,” Parmi said.
Business, Bonang said, needs decisive and more incisive leadership to regain its independence, reputation and credibility.
HR leaders, Moula said, have a fundamental and critical role in helping counsel board chairs. chairs of subcommittees, and CEOs around how to think out of the box in growing the skills set.