Lack of feedback is self-destructive

 Investors have seen their fair share of governance failures in recent decades and they started looking at board compositions with a critical eye. The cost of governance failures is real, tangible, and terrible and if you have lived long enough, you observed that. In the aftermath of the global financial crisis and numerous corporate scandals, there seems to be a lack of governing body evaluation.

Fascinatingly, I can’t think of a single workgroup whose performance gets assessed less rigorously than corporate boards. According to behavioral psychologists and organizational learning experts; people and organizations cannot learn without feedback. A lack of feedback is self-destructive. No matter how the good board is; it’s bound to get better if it’s reviewed intelligently.
 

In a nutshell, boards need to conduct board evaluations because it’s considered a best practice. Whether it’s a public board, private board, or non-profit board, all board members are accountable to those they serve and they need to do the best job that they can during their board service. Board evaluation is a process where boards assess their effectiveness. The purpose of board self-assessments is to be sure that boards are fulfilling their duties and responsibilities and that appropriate processes are in place to ensure that boards are giving due diligence to planning and oversight over the organization. Essentially, no one directly oversees the board, so they must take an annual objective look at themselves as individual directors and how they function as a group.

King IV recommends boards to evaluate their performance because they will be able to assess whether their members possess the right mix of backgrounds and competencies necessary for the board. Equally, the new Public Enterprise Governance Act (1/2019) made provision for performance agreement with the board members; this may serve as a wakeup call to the governing body to prepare and gear toward board evaluation. How directors interact with one another has a major impact on their effectiveness. 

The crucial basis of good corporate governance is to help each other and to do so ethically with a high level of moral conscience thrown into the mix. Hence, board directors should be evaluated not only on the knowledge and expertise that they bring into the boardroom but also on how well prepared they are at meetings and how well they interact with other board members. Through the evaluation, the board will ensure that board directors don’t have any current or impending conflicts of interest.

In setting up the evaluation framework, the governing body should ask itself whether the exercise is the result of regulation, a commitment to good governance, merely a compliance exercise, or it is aimed at improving and sustaining the performance of the governing body, its structures, and individual members. Based on the board purpose of evaluating the following objectives should be tested:

•  Quality of the monitoring and risk-management role.

• Quality of the strategic and other business-related advice.

• Board dynamics and board members’ pro-active participation.

• Diversity of the board

It is the responsibility of the governing bodies to develop a robust process for evaluation which must be done each year and consider a rigorous independent board evaluation to be carried out every three years by an external expert as a best practice. The chairman, supported by the company secretary, has responsibility for the process of board evaluation and for acting on the results. Generally, the outcome of the evaluation should be shared with the whole board and the results should influence, as appropriate, the future operation, development, and composition of the board. 

No alternative to good governance and any board with a vision will be attracted to board performance evaluation. Governing bodies’ performance review should make it to every boardroom table across the globe. The review may benefit the individual directors, boards, and above all the organizations. Further, it gives the external bodies a reassurance that governing standards are of a certain quality and lastly, boards’ evaluation process is an effective team-building and ethics-shaping activity.

By:

Onesmus K Joseph - ACIS/BAP/CFIP/PPL

MPHIL Candidate - KNUST (Kumasi; Ghana) 

Governance Professional

josephonesmus@yahoo.com

World Pilots' Day 2020

26 April is World Pilots' Day. This year, the day will be no much of aviation activities because, those that were meant for the sky are now grounded for obvious reason (COVID 19). 

Among other professions I’m a private pilot. I worked over 40 hours a week to become a pilot during my first degree. My days were made up of studying and working. The goal at the end was to obtain a University degree and fly for lifetime.

The future of aviation lies in the hands of the youth and is my desire to see many of them taking up a career in aviation. Youth must be given opportunities to become pilots. Probably flight training need to be cheaper and we need to create more aviation awareness programs. There is a need for more scholarships for aviation students to ensure the involvement of youth who are less privileged.We as Pilots should help new and aspiring aviators to succeed and encourage them to take up the pilot as a career.

Flying makes you smarter and the knowledge gain as a pilot can be imposed everyday life. It helps to become an expert in planning, staying organized, and a good decision-maker. Aviation is demanding and one have to be up to date with new procedures and regulations. Each day in aviation is a learning day, even after flying an aircraft for a couple of hours there will always be something new about it. 

Aviation is such a unique community, one filled with storytelling and tales of hardship and intense heart-wrenching desire. There is much expectation in performance, required to be on top of your game at all times and fight the battle to succeed in the face of failure, but is doable. The opportunity to become pilots can be given but one has to work hard to earn the golden epaulettes on their shoulders. Completing a PPL you get a medal that you can wear with honor and pride for a lifetime

                        "The hard won medal"

By:

Onesmus K Joseph - ACIS/BAP/CFIP/PPL

MPHIL Candidate - KNUST (Kumasi; Ghana) 

Governance Professional

josephonesmus@yahoo.com

Integrated Reporting (IR) enhances integrated thinking

The 21st Century has witnessed a rapid increase in the debate about the ability of the current reporting model to provide a fair reflection of an organization. Growing in importance is the ability of reports to provide information on the impacts a company has on its stakeholders, society, and the planet. The World Economic Forum Global Risks Report (2020) indicates that, long-term risks facing businesses are for the first time environmental and should be communicated to stakeholders. Current reports are silos presented and only a management that is divorced from reality may think such reports are sufficient for informed assessments. Some of the governing tools such as NamCode and King IV recommends for organizations to strengthen their reporting models and stakeholders` relationship to achieve the organizational outcomes.

With a determination in improving organization reports, the International Integrated Reporting Council (IIRC) in 2013 launched a framework on Integrated Reporting (IR) that outlines how companies can meaningfully engage with all stakeholders and disclose all relevant information. The information includes both good and bad while observing the principle of confidentiality. IR is globally accepted as the best mode for businesses to provide investors and other stakeholders with a more holistic approach to reporting both financial and non-financial results.

Ironically, the adoption of integrated reporting continues to grow, but some public and private companies are still hesitant in implementing IR. It is yet the right time to consider IR, as the just-ended month of March marks the end of financial years for many organizations and as you are reading this article probably most entities are busy preparing their annual reports.

The desire to promote financial stability and sustainable development by better linking investment decisions, corporate behavior and reporting has become a global need. This is to say; the reason for an entity not to implement IR will be of much interest. Integrated reporting is a process initiated on integrated thinking that results in a periodic communication (report) by an organization about value creation over time. A good Corporate Citizen will concisely communicate to their stakeholder on how the organization’s strategy, governance, performance, and prospects, in the context of its external environment lead to the creation of value in the short, medium, and long term.  

In as much as IR is a new generation of annual reports and is voluntary, it also acts as a catalyst in complying with statutory regulators such as the Namibian Companies Act (Act,28/2004), the Namibia Stock Exchange (NSX) Listing Requirements, and International Financial Reporting Standards (IFRS). Its framework is designed flexibly to allow implementation by both public, private, large or small, for-profit or not-for-profit organizations.

Generally, few entities fully adopted the integrated reporting framework. One of the perfect examples is Capricorn groups; their reports for 2017 and 2018 scooped the Regional Company Award at the Annual Integrated Reporting Awards hosted by now renamed Chartered Governance Institute of Southern Africa (CGISA). Despite this notable achievement, many organizations are struggling with some important principles and content elements of IR. It is important to note that, for a report to be regarded as an integrated report; it should cover the following fundamental concepts of integrated reporting:

• Value creation. The creation of value in a sustainable manner.

• Capital or resources. Six capitals are financial, manufactured, intellectual, human, social and relationship, and natural. It is inconceivable to think that companies should continue focusing on a wealth creation of shareholders only while there are myriad of inputs affecting company outcomes.

• Business model. The business should narrate the business model of a company that will generate value in the future.

Governing bodies should understand that IR is not aimed at replacing the normal Annual Financial Statement or Annual Report as required by different regulators, but an additional report, which provides meaningful information regarding business value creation in a sustainable manner. IR can be prepared as a standalone report or be included as a distinguishable part of other existing reports although stand-alone is highly recommended.

At its most fundamental level, the integrated reporting movement emerged to help restore trust and confidence in company disclosures, and to give shareholders that all-important authentic view of performance. It helps in understanding how businesses are addressing their current and future challenges, how they employ their resources and relationships to create value in the long run. With IR, corporate Leaders will be more involved in integrated thinking and they will gain a better understanding of enterprise risks; a stimulation of thinking which does not exist with the historical financial statements.  

All we need is a change in mindset at the board and senior management level to accept that there is an interrelationship between the use of resources by the company and the company’s relationships with its stakeholders, hence a need to report on them. Board members should know that among their fiduciary duty is to ensure that organizations prepare a concise communication (Integrated report) to their stakeholders. Company secretaries as gatekeepers of good governance should ensure that integrated reporting forms part of the boards` agenda at an early stage and not a last-minute action.

Integrated reporting remains a key factor in promoting good corporate governance. Institution should break the information gap by implementing IR. It will be a milestone in governance to see organization be it State-Owned Enterprise (SOEs), Public, Private, Trustees and Non-Governmental Organizations (NGOs) embracing integrated reporting framework.

Ironically, integrated reporting is not really about reporting at all. It’s about integrated thinking, responsible business behavior and innovation

BY

By:

Onesmus K Joseph - ACIS/BAP/CFIP/PPL

MPHIL Candidate - KNUST (Kumasi; Ghana) 

Governance Professional

josephonesmus@yahoo.com

750 under microscopic lenses

The government of the Republic of Namibia recently launched an emergency income grant (EIG). A once-off payment of an amount of N$ 750.00 to all Namibians who are between the age of 18-59 unemployed, employed or self-employed in the informal sector and have lost their jobs or income due to measures put in place to combat the spread of COVID-19. The grants’ aim is to ensure that the basic standard of living is maintained. During the official launch of the EIG Hon Iipumbu Shiimi, the Minister of Finance encouraged potential beneficiaries to use the money wisely.

Are you waiting for the Ka-ching notification on your mobile phone? Please just a second; have you drawn your budget? Be reminded to set your priorities so well and manage your spending by creating and sticking to a budget. With the given means of (N$ 750.00), it is time we pay no attention to our wishes and focus only on the essential needs. 

The amount may seems little, but if spending is slightly adjusted, the N$ 750.00 may make a difference. Individuals eligible for the grant are encouraged to budget and make sure that their basic needs are within the brackets of the grant. Given the constrain, budgeting is crucial because it will helps in directing spending to much needed essentials only. When one do not have any idea of what to spend on, the probability to waste is very high. The insufficiency of the grant does not justify thoughtless spending. The generic budget below may assist in spending the grants wisely, while waiting and hope for the situation to normalize. 

Generic Budget  

Grant                                                                    N$ 750.00

Les: expenses                                                                                   

 Power/Gas                                    N$ 120
 Food                                            N$ 340.00

     Emergency reservation                  N$ 150

     Toiletries                                      N$ 85

     Transport                                      N$ 55.00

                                            

·        Total expenses                                                       N$ 750.00

       

          "Budget matter most with limited resources"

                   BY M.P Ndjambi and O.K Joseph

The need of the hour is all hands and resources on deck to fight COVID-19

With the number of COVID-19 cases increasing in the country, His Excellency the President Dr. Hage Gottfried, Geingob declared a state of emergency on account of public health and subsequently announced measures to be take in curbing the spread of the virus. It used to be said that when “America sneezes, the world catches a cold”. But, as we wake up to the virulence of COVID-19, the knock-on contagion from China is stoking global fear.

The country is on a lock-down, church gatherings, sporting events and conferences are suspended, staff are being told to work from home, and panicked consumers are stockpiling masks, medicines and shelf-stable foods. In this state of fear and the unknown, we need to remain calm and follow all guidelines as issued. One may have observed the efforts of the government in containing and mitigating the spread of the virus. Nonetheless, we cannot be relying on the government alone; we all need to do our part in curbing the spread of this virus.    

Gone are the days where the government was considered the exclusive social change agent and problem solver of the society. So where are the private sectors? Many corporations or entities'  existence depend heavily on the community as their customers, so firms cannot survive on their own and it is not reasonable for corporations to idle back and observe their stakeholders (customers or society) being exposed to coronavirus. It is a high time for companies to come on board through moral duties and complement the government’s efforts to minimize the spread of coronavirus.

Organization and society are interdependent and in this context, the moral duties of companies and the idea of interdependency between organizations and society are manifested in the concept of Ubuntu, which is captured in the expression 'uMuntu ngumuntu ngabantu', 'I am because you are; you are because we are'. Ubuntu implies that there should be a common purpose to all human effort, including corporate endeavors that is based on service to humanity. As a logical consequence of this interdependence, one person benefits by serving another. Companies are to find better ways of plowing back to the community through Corporate Social Responsibility (CSR) most especially during this time.

Corporate Social Responsibility (CSR) requires the governing body of an entity to govern the organization ethically that is seen as a good corporate citizen. A citizen that has comprehensive policies and practices in place that enable it to make decisions and conduct its operations ethically, meet legal requirements and show consideration for the society and able to address issues of the communities. Corporate citizens are part of the community and their mandate is not just to make a profit but also to aid and advance the society.

During this dire situation of a national health emergency where the health of the stakeholders is at risk, organizations are expected to help the society where they operate with whatever fit to mitigate and prevent the spread of the virus. Organization needs to take advantage of this calamity and invest in the community through CSR because it builds a positive relationship with the community, as the firm would now be perceived as a member of the community. Also, the entity may pay less in corporate tax because costs for CRS are an allowable deduction for tax purposes and CSR enhances corporate image and adds brand value.

COVID-19 is a socio-economic challenge that has effects on individuals and business sectors in our country. The prevalence of COVID-19 may have a direct impact on the company’s workforce resulting in absenteeism due to illness, loss of skilled workers, loss of customers and most importantly potential loss in profits. The disease if it is not contained is likely to result in loss of valuable skills and stable breadwinners whose families will then become dependent on the state’s welfare system.
In his briefing statement on the 24^th March 2020, His excellency The President Dr. Hage G. Geingob pledge N$ 250 000.00 toward the fight of the virus and invited the private sectors to support the government and mobilize resource to combat the further spread of the virus. Hence is important for private sectors to focus on helping their most vulnerable stakeholders, which is the community by supplying them with for instance sanitizers, mask or gloves. The need of the hour is all hands and resources on deck to fight this coronavirus.

With the active involvement of the private sector in fighting coronavirus, we may have hope that much-needed relief can be brought to affected people in parts of the county and then suppress spread the deadly virus.  

                   “A business that makes nothing but money is a poor kind of business”
By:

Onesmus K Joseph - ACIS/BAP/CFIP/PPL

MPHIL Candidate - KNUST (Kumasi; Ghana) 

Governance Professional

josephonesmus@yahoo.com