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Opinion: Unethical behaviours by top managers and boards

2021-07-19  Staff Reporter

Opinion: Unethical behaviours by top managers and boards
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Unethical conduct by SOEs’ top management, boards of directors and shareholder representatives, coupled with appointing wrong, envious people on boards harm an organisation’s agenda. Self-interests drive several SOE boards, with a clear example being the recent reports about Fishcor in the media, and Namcor reports in the past. The board serves an organisation with a vision of benefiting something from that organisation, which contrasts with the top leadership’s responsibility to provide the organisation with direction.

Based on the SOE 2020 research results, the participants unanimously stated that the board in charge of the organisation caused dysfunction, which resulted in the top managers’ inability to concentrate on carrying out their organisational objectives due to the board’s interference. The board members should hold a minimum of an MBA, and they need to prove that they have received training in SOEs’ corporate governance and emotional intelligence to qualify them to be appointed. Some board members are destabilising the organisations.  Some participants stated that board members should be appointed based on industry expectations and expertise to avoid misunderstanding and misleading decisions taken by the board on behalf of the organisation.

The challenge SOEs face with boards is the board members’ appointment, who earn less than the top management of the organisation they are supervising. Top management earns more than board members, which leads to non-ethical, personal agendas and them being envious of top executives. The appointment of the CEO is influenced by politics because the Government, which has led to failures at various SOEs, owns SOEs.

The SOE 2020 research furthermore revealed that an organisational structure determines the top organisational leadership growth opportunities it can offer to its employees within the organisational structure. Participants stated that executive leaders should understand corporate governance for individual SOEs, and not treat them collectively. The CEO must impact the organisation’s administration and direction through close association with the board of directors and, more importantly, the committees’ chairperson and other board members. 

The challenge is that individuals do not like reading. However, it is essential to understand corporate governance, and how it can help the organisation.  A participant said people come to the organisation for a limited time, like three years’ contracts for the board of directors, and five years’ contracts for top SOE management. This leads to the destabilising/stabilising of the organisation when board members change, depending on the relations that top management has with the board. It was emphasised that the board and politicians should go through that specific SOE’s introductory corporate governance course before serving on the board. Some of the board members have no idea of Namibia’s SOE corporate governance.  

Individuals at SOEs need to be adequately trained in corporate governance to deliver. Participants stated that board members should be on the same wage level as the top management to prevent board members from destabilising the organization and taking up the SOE’s top leadership positions. There is a need to recognise the two types of leadership. Some leaders carry out operational tasks, while others are responsible for crafting the organisation’s strategic plan. 

The board of directors champions the organisational corporate governance or systems of rules. The board is meant to observe the things done by top management in the organisation, give guidance and recommendations, and reject wrong decisions or proposals by senior management. Therefore, it is the chief executive officer’s responsibility to inform the directors of the overall organisation’s performance. The chief executive officer advises or makes the board’s recommendation, based on the chief executive officer’s experience. Participants stated that top leaders and board members tend to insult other leaders due to a lack of emotional intelligence qualities in leaders. 

Participants stated that some board members are appointed because of their relationship with politicians in power, and they do not adhere to the organisation’s corporate governance, thus doing as they please. Participants stated that a lack of emotional intelligence and maturity has caused some senior people to leave SOEs and SOE boards because they could not cope emotionally due to pressures. There is a growing desire to know who you are, your feelings and being aware of how to control and express emotions, and handle interpersonal relationships empathetically.  

Participants stated that there are fights for top management positions, and there is much self-interest. There is a need for a confident board of directors’ team, and this will lead the team to make decisions that will lead the organisation to success.

Emotional intelligence is essential, like training people to control themselves and remain calm; abilities to manage emotions are critical, and it is necessary. A participant stated that a leader is considerate and their charismatic leadership style makes people listen to them, convince them, direct them, and move them in a specific direction as a team. Transformational leadership styles transform the organisation. A participant observed that as a leader, individuals should not lead from the back. Choosing individuals for the executive team is becoming harder as it is crucial to quantify the individual for the position with a certain level of comfort and accuracy. 

Despite the existence of sophisticated tools that can evaluate individuals aspiring to fill leadership positions in those organisations, the evaluation conducted by them via software is not sufficient to assess the abilities of the person, and it is premature to make a decision based on those results when recruiting an
executive.

 Due to the environment that the top management team or organisation’s executive operates in, their expertise, adeptness and capabilities that got them the top job might not serve the situation they are working in when it changes. The research revealed that some of the board members do not hold an MBA; as a result, they lack the fundamental business holistic approach. There is a need for those entrusted with board positions to ensure that they get support or buy-in from the rest of the team members to promote teamwork and success, instead of using intimidation, fear and scare tactics.  The research results revealed that the participants have observed that the Ministry of Public Enterprises has introduced some improvements. However, a lot still needs to be done in making courses such as Namibia SOEs corporate governance and emotional intelligence mandatory for board members and top organisational managers.        

 

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


2021-07-19  Staff Reporter

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