Leadership relationships are critical at the executive management level by appropriately managing the organisation. Some non-executive board members want to be involved in the organisation’s procurement; non-executive board members need to know that procurement is a day-to-day responsibility for the top management of the SOE and not the board’s responsibility.
Understanding corporate governance at the board and top management level is essential. There is a corporate governance framework at some of the State-Owned Enterprises (SOE). For the board to suspend or dismiss the organisation’s top managers, the board needs to seek public enterprises’ ministry approval. The top management, the board and the ministers must be aligned with the organisation’s policies. Some board members have self-interest and tend to force their agenda on the top management of the SOEs.
Some of the individuals appointed on boards earn much lower than the top leadership of the organisation. The conflict with the board and top management begin with appointing low-earning board members; they delay or dispute the top executive salary increments and benefits, more specifically the CEO/MD. The challenges are the appointment of wrong board members and CEOs, which strain relationships in the organisation because the personalities and character of the leaders are not aligned.
The Public Enterprises Governance Act 1 of 2019, states that the salaries and benefits of the CEO/MD and some management staff of an SOE are decided upon by the board of that public enterprise, together with the appropriate minister – and this process should follow the Public Enterprises Governance Act 1 of 2019 directives.
Appointing ethical individuals in positions of top leadership is essential. If a competent CEO is not appointed in those positions, then we should not expect the SOEs to be successful. The appointments of the board members, MD and CEO have been influenced politically in the past and it is still happening, as politicians are still appointing some of the CEOs. The recipe for failure is the appointment of a comrade in the board and CEO or MD positions.
There are reasons for requesting top organisational executives to vacate their positions; dismissals are unavoidable if the existence of problems in the organisation is due to operational challenges between the organisational executive leaders and the board of directors or between the CEO/MD and his executive team.
A safe and conducive environment is essential to management. Understanding corporate governance at the top management level is essential to foster relationships. With the CEOs who were specifically appointed by the President of the Republic of Namibia, when they are not performing, are they answerable to the board or the president? For instance, in the case of the CEO of Namibia Investment Promotion and Development Board (NIPDB), will the board get into trouble for disciplining such a CEO who was appointed, meaning who did not go through the interview process?
Moreover, why should some be appointed whereas certain CEOs and board members are interviewed? Again this has an impact on the organisation’s relationships. Because, we know that you, as a CEO, were not interviewed, and you were just favoured or got into that position through nepotism; the business world term is ‘networking/headhunting’. A number of CEOs and top managers are disrespected due to this practice of favour/nepotism.
The board of directors – as observers of the organisation – have the responsibility to discharge poor executives/managers who are not producing desired results for those organisations. However, with politicians appointing some of the CEO, this can present a challenging task for the board.
The CEO or MD and the top management need to be responsible; some SOEs are operating within their mandate, and their strategic scope is evident. The 2020 SOE research revealed that there are issues that the board and top management are not agreeing on, which impact the operation and the SOE leadership.
Participants stated that there is nothing wrong with the board investigating top management; they can request information from the organisation because the board is there to perform the supervisory fiduciary duties. However, the participants stated that some of the board members had been CEO’s in the past; they have an interest in the organisation and force their agendas on the organisation’s top management and, at times, through suspensions and investigations, so that they can be appointed to acting positions while the CEO/MD is on suspension or fired.
The organisation does not only dismiss when it is unable to meet the desired performance; however, various reasons can lead to dismissals, namely: sexual orientation, age, how individuals look, ethnic background and personal challenges such as personalities and characters. The problem caused in the organisation by the board is, at times, by appointing junior staff to act in a CEO or MD position after suspension or for the member of the board to act in that position after dismissing or refusing to renew the previous CEO’s contract, causing challenges in the organisation and on how employees relate to one another.
Some CEOs or MDs are operating in battle zones because some of the employees report every single activity in the organisation to the board, and this creates insubordination because they know the board will protect their bad behaviour, and the CEO/MD is left to use their wisdom. That is why the person appointed must have some experience in leadership and relationship building; otherwise, if they lack wisdom, they will be fighting with everyone in the organisation, shatter the relationship in the organisation, and fail as the leader of the organisation. Meetings will be unbearable due to broken relationships among employees and top executives, and some members of the organisation will use the media as a means to be heard and to destroy their colleagues’ credibility; for example, TransNamib board members who resorted to communicating through legal counsels.
Politically appointed executive leaders can create an uncomfortable environment because they feel entitled due to them having fought for liberation or were in exile – and that is enough qualification for them to be given leadership positions. Those who, with their parents, will not be considered for those positions even if they qualify for those positions. However, if a person has the experience and is a political appointee, they can perform and at times outperform the professional or interviewed appointed executives.
At the end of the day, it does not matter how you got to the top. You are at the top in that leadership position, now what? Are you playing your political exile ticket to cover your inefficiency or are you doing everything in your power to serve and be remembered for your excellent contribution and relationship-building qualities?
*Dr Rauna Shipena is a doctor of management graduate from Colorado Technical University in the USA. Her doctoral degree concentration is in executive leadership (Organisational corporate governance). She is a scholar-practitioner and can be contacted at: firstname.lastname@example.org.