The board’s responsibility to the organisation and the responsibility of top managers’ responsibility to the board are not understood. Some board members understand their fiduciary duties, whereas others do not understand these duties.
Those in the latter category become involved in the organisational day-to-day operations; thus, they interfere with the operation – and in some cases, take over the duties of the managing director and top organisational executives.
The board is supposed to play the overseer role to the organisation – and if it fails to play its role, its fiduciary duty role can be perceived as weak.
The organisational role is critical to those holding the positions. The board’s roles need to be precise; top management’s role needs to be exact, and the ministers’ role needs to be clear and aligned with the organisation’s policies and procedures. Thus, a clear separation of roles is critical.
Top managers operate the organisation on behalf of the owners. If the board or the top management carries out one another›s roles, problems between the board and top management begin. The roles of the board of directors, top management, the board and the line ministry roles need to be in line with the organisation’s objectives.
Some state-owned enterprises (SOE) top managers know where their roles end. The Namibian nation expects the people appointed at the board level to know and have an understanding of their roles. SOEs employees expect board members appointing authority to ensure that those being appointed in board positions understand their responsibility to the organisation.
The organisational environment’s ever-changing world and those entrusted to lead the organisation will do well to be aware of the different types of environments that could positively or negatively affect the organisation’s operations and profits. The board is required to plan for the organisation for the future.
The SOE research of 2020 results revealed that the role the board play is not clear to all the individuals; some top executive managers in some SOEs do not understand their roles and functions. There is an exception of few board members who understand their fiduciary duties.
When leaders have different experiences, this can significantly enhance the efficiency and the effectiveness of the organisations they serve, as they can draw from their past experiences. People appointed in the overseeing board of directors’ position to give orders to the chief executive officer, in most cases, fail and make decisions contrary and detrimental to the organisation due to a lack of the organisation’s operational know-how because they do not understand and appreciate the work being carried out in the organisation.
The role of the chief executive is to make an impact, transform the organisation that can compete with private entities, and plays a more significant role in the industry.
The SOE research of 2020 results revealed that understanding top organisational roles is critical to those holding those positions. Planning for the organisation can only be effective if the organisation adopts the organisation’s plans as the primary driver to reach those ideals; management needs to implement the strategy throughout the organisation and report to the company board members as necessary.
Participants stated that the organisation’s conflicts exist between the board and the top management because the board is carrying out the top management’s duties. It is not clear where the roles of the board begin and where it stops. Participants stated that corporate governance is critical in providing clear guidance regarding the role top managers play and the role the board play.
Lack of understanding of the roles by the top leaders is a concern because they are the ones who are not following the set rules and procedures, and the board and top managers are competing instead of complementing each other. If the board does not understand their duties, it can harm the organisation because of the limited time they spend at an organisation; clear separation of the roles is critical.
It will help the board members to concentrate on the deliverable and worry less about the CEO’s pay. Why are the CEO and top executive paid a lot of money if they are just paper pushers? A number of people are ignorant of the tasks and responsibilities of CEOs and top executives. There are the personalities that top executives need to deal with, which include individual characters and those back biters.
Moreover, there is the actual strategy that needs to be implemented and executed amid all the challenges in the organisation and employees. Sometimes, these people are trying to extinguish the fire at the office while they have big fires that need to be put out in their own homes or personal lives. So, the high pay is meant to appreciate their sacrifice and to make up for carrying the organisation on their shoulders – simply put.
In the same manner, there are reasons the board earns less than a CEO and top managers because they are expected to live for the organisation during their contractual period.