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Opinion: SOEs board members need training

2021-07-09  Staff Reporter

Opinion: SOEs board members need training
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Research, conducted in 2020 at a state-owned enterprise, suggested that the board members and top management leaders lack SOE corporate governance understanding, and need corporate governance and emotional intelligence training.  

Top organisational leaders and the board need the training to understand corporate governance structure expectations for organisational top management and board members. There is a level of political interference in operational activities by the board members and the ministers. 

The interference by the ministers will always be expected because the government is the shareholder of SOEs. However, the board should adhere to corporate governance fiduciary requirements and duties. Every board member, serving on SOE, should undergo Namibia SOE corporate governance training. 

Due to a lack of fiduciary duties understanding by some board members, when they are appointed to serve, some board members misunderstand the operational duties and fiduciary duties while they are serving as board members. They want to be involved with procurement operational responsibilities because they do not understand their fiduciary duty and want to be involved in the organisation’s day-to-day operations. 

The board and top management should go through corporate governance courses before they are appointed. Several board members do not have any idea about Namibia SOE corporate governance, especially from the private sector. Those wishing to serve on the SOE board should undergo a basic Namibian SOE corporate governance course before they are allowed to serve on those boards.

There are Acts in place that provide guidelines and policies to SOEs. The board members need to promote servanthood, and being of service to others and the organisation. 

Before the board’s interest, the board’s interests need to come second, and the greater good of the organisation has to come first; a number of board members are just serving their own needs and interests by benefiting as much as they can from the SOEs they are serving. 

State-owned enterprises’ operational disturbing behaviour by the board is the type that hinders organisational performance and cost the organisation time and money. There are dysfunctions at leadership levels, either in teams or groups; hence, credible teams need to lead the organisations. 

Board members trying to dismiss top managers might find it difficult because the ministry of public enterprises in Namibia no longer tolerates such practices of board members causing dysfunctions at SOEs. 

The participants stated that some board members and board chairpersons resigned from the SOEs because the board members tried to discipline the top managers, including the MD. The ministers did not support the action of the board to destabilise the organisation; instead, the minister reinstated the top managers and the MD. 

The main reason for appointing the board of directors is to look after the interest of the shareholders in their absence, and the board of directors acts as the gatekeepers of the organisation to alleviate organisational problems and ensure the shareholder interest is growing and safe. But due to a lack of understanding by the SOEs board members, the shareholder gets involved and makes the decisions, which board members are failing or supposed to make.

 

The participants stated that the top managers’ roles and the board’s roles align with the organisation’s governing policies in documents but not in practice. Participants further stated that it would go against the organisational governance guidelines and policies if the board was not aligned. The participants have observed that the board members on the same team do not have the same understanding of the Namibian SOEs’ corporate governance expectations. 

The board needs organisational governance to guide them and convinced them to work together so that they can capitalise on members’ expertise and skills; lack of control over the board is a significant problem for the shareholders; henceforth, the majority of the board members do not work as a team but as individuals in the team. 

This is a clear indication that emotional intelligence training courses are needed, especially at the top management and board leadership level. If top management is unable to control their emotions, the organisations will likely be dysfunctional, and this creates individuals who feel they are untouchable. 

They cannot work as a team, making it difficult for their supervisors to discipline them. These individuals do as they please in the organisations; the CEOs/MDs are powerless due to a lack of harnessed and well-sharpened leadership skills. The CEOs/MDs cannot afford to be fighting with their teams because the operation will suffer. 

Emotional intelligence and personal development courses are the keys to deal with unstable top managers and board members.

A majority of SOEs in Namibia, when the term of the CEO is coming to an end, the board purposefully destabilises the organisation because it does not want to renew the CEO’s term. 

However, there exists a conundrum and uncertainty of how some state-owned enterprise board members contribute toward the organisation’s effectiveness; how the board operates and their procedure can be the primary impediment and has defied the ability to anticipate their action significance on organisational performance due to entry to board meetings obstacles. Every board is different and characterised by the board chairperson’s leadership style(s).

 

* 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). A scholar practitioner and can be contacted at rauna07@gmail.com.


2021-07-09  Staff Reporter

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