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Business News of Wednesday, 21 May 2025

    

Source: www.ghanawebbers.com

The Inconvenient Truth with Douglas BOATENG (Prof): A chairperson alone cannot paddle a canoe in a storm

The Collective Mandate of Governance

Corporate governance is a shared responsibility. It requires active participation from all board members. Each director has a fiduciary duty to ensure accountability and transparency.

Frameworks like the King IV Code stress that all directors share equal responsibilities. Silence in the boardroom does not exempt anyone from their duties. Every director must act in the company's best interest.

The Perils of Singular Accountability

In crises, it’s easy to blame the Chairperson. However, board decisions are collective efforts. Governance failures often reflect systemic issues, not individual faults. Recognizing this shared responsibility fosters accountability and resilience.

Cultural Nuances and Governance Dynamics

Cultural norms can lead to passive board participation. In some contexts, deference to authority may stifle open dialogue. Political appointments can create conflicts of interest in state-owned enterprises. Addressing these challenges requires understanding cultural dynamics and promoting inclusive governance.

First Among Equals – But Equals Nonetheless

The Chairperson guides discussions but does not act alone. The law treats executive and non-executive directors equally regarding fiduciary duties. Each director must think critically and protect company interests.

Silence does not mean safety; it can indicate complicity. A respected South African board veteran noted: “If you have no point of view, you have no business on any board.” Many non-executive directors adopt approval rather than scrutiny due to cultural politeness.

This creates a passive environment where only the Chair takes center stage. No Chairperson can save a failing organization alone, just as an orchestra cannot blame only the conductor for failure.

The Myth of the Scapegoat Chairman

When crises occur, attention shifts to the person at the head of the table. This narrative simplifies complex governance issues into scapegoating the Chairperson. However, each director shares responsibility for oversight.

If something goes wrong, every silent member contributes to failure. The illusion persists that the Chair is both hero and scapegoat while others remain insulated by irrelevance.

This myth needs dismantling gently but decisively; Chairs are first among equals but still equals.

When Shadows Nurture Negligence

In many African boards, political appointments often overshadow professional qualifications. Non-executive directors may be chosen for loyalty rather than expertise, leading to rubber-stamping decisions and neglecting risk management or ethics.

A disengaged director is like a night watchman asleep during a break-in; they cannot claim vigilance after harm occurs.

Laws across Africa agree: being non-executive does not mean being non-responsible.

Lessons from the Ashes

Africa has seen numerous governance failures that highlight passive roles within boards:

- Steinhoff International (2017): An accounting scandal revealed serious lapses in oversight.
- Eskom: The Zondo Commission exposed failures preventing state capture.
- Cadbury Nigeria (2006): Financial misstatements led to significant losses.
- Ghana's Banking Crisis (2017–2018): Negligent boards caused bank collapses.
- NMC Health (UK): Governance failures resulted in financial collapse due to poor oversight.

These cases emphasize active engagement's importance in maintaining organizational integrity.

Global Perspectives on Boardroom Accountability

Governance challenges exist worldwide:

- Enron (USA): Lack of vigilance led to unethical practices and collapse.
- Carillion (UK): Reports highlighted systemic governance failures contributing to downfall.
- HIH Insurance (Australia): Board negligence resulted in significant corporate collapse.
- Volkswagen (Germany): Governance failures triggered emissions scandals highlighting oversight needs.

These examples reinforce global demands for robust governance structures.

The Culture Must Change

Passive directors must become a thing of the past; shadows are no longer safe havens in boardrooms. Every seat carries weight; every role should be equal in practice as well as theory.

We need empowered boards instead of ceremonial gatherings that merely "board." Directors should rotate committee roles and undergo independent evaluations reinforcing their duties over deference.

Strategic Imperatives for Enhanced Governance

To strengthen governance frameworks:

1. Empower All Directors: Encourage active contributions from every member.
2. Implement Regular Evaluations: Assess performance periodically for improvement opportunities.
3. Promote Ethical Standards: Foster integrity within organizational practices.
4. Enhance Transparency: Ensure decision-making processes are open and documented.
5. Encourage Continuous Education: Provide ongoing training on evolving best practices in governance.

The Role of Technology in Governance

Technology can significantly enhance governance practices by improving transparency and communication while facilitating effective decision-making processes.

Conclusion – Charting a Path Forward

Corporate governance faces multifaceted challenges involving cultural, structural, and ethical dimensions requiring concerted efforts from leaders at all levels.

By embracing collective accountability and fostering inclusive dialogue, organizations can build resilient structures serving both corporate goals and societal interests effectively.


As an African proverb states, “When spiders unite, they can tie up a lion.” Through unity and purpose, we can navigate complex governance issues toward sustainable development.


Future Directions

Organizations must stay vigilant as governance landscapes evolve:

1. Integrate sustainability into frameworks.
2. Promote diversity on boards.
3. Leverage technology for efficiency.
4. Strengthen stakeholder engagement processes.


By adopting these future directions, organizations will build more resilient structures benefiting both corporate objectives and society at large.


*About the Author*

The writer is an esteemed thought leader known for transformative contributions across various sectors including supply chain management and industrialization in developing nations.


He has served as Chairman of notable institutions like MIIF while advocating for ethical governance through his platform NyansaKasa with over one million daily readers.


Professor Boateng continues inspiring innovation while driving Africa towards sustainable growth through visionary leadership focused on youth empowerment.