Nigeria: Corporate governance: putting the role of the chairman in perspective
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As the role of the president has grown in importance due to the increasing pace, size and complexity of business operations globally, most directors have only a vague understanding of what the president’s job actually involves. From a legalistic point of view, Nigerian Companies and Related Affairs Law provides a very narrow definition of the role and responsibilities of the chairman of the board of directors. The law simply provides that a board of directors can choose one of its own to chair its meetings and the general meeting of the company. The Chairman will also have a casting vote, unless otherwise provided for in the Company’s articles of association. That’s it. However, we can refer to the Nigerian Code of Corporate Governance to better understand what the role of the president entails.
The Nigerian Code of Corporate Governance sets out the principles to which public companies and regulated private companies must adhere and requires the chairmen of these companies to provide
“leadership of the Company and the Board, and eliciting constructive participation from all Directors to facilitate effective leadership of the Board”. Helpfully, it provides examples of board practices that will demonstrate such leadership, and presidents of all types of organizations, from SMEs to the largest listed companies, should ensure that these vital practices do. part of their governance toolbox.
The primary responsibility of the Chairman of the Board is to ensure the effective functioning of the Board so that it works as a group to achieve the strategic objectives of the Company. He should also provide advice to the CEO / CEO and be available for regular communication. The president’s duties should include approving an annual board plan with the board; ensure that the agenda for Board meetings is established; ensure that the board and its committees are composed of individuals with the relevant skills, competencies and desired experience; ensure the smooth running of Board meetings; ensure that the board is effective and operates in a coherent manner; ensure that induction programs are organized for new directors and that a continuing education program is in place for all directors; ensure effective communication and relations with the Company’s shareholders and other stakeholders; and play a leading role in the assessment, improvement and development of the Board. The chairman is responsible for ensuring that management provides directors with accurate, timely and adequate information.
How essential are these responsibilities of the president? According to the famous British businessman Sir John Harvey-Jones, who was chairman of Imperial Chemical Industries plc (ICI) from 1982 to 1987 (formerly the largest company in Europe) “If a business succeeds, it is because of everyone’s efforts, but if it fails, it is because of the failure of the board of directors. In the event of failure of the board of directors, the responsibility rests with the Chairman, notwithstanding the collective responsibility of each. Despite this collective responsibility, the composition and performance of this supreme governing body depend on the President’s shoulders. “ This statement is extraordinary given that while most presidents can be business leaders, they rarely have specific training for the role and literally learn on the job or from other presidents. This leads to a wide variety of styles and a wide range of board effectiveness, with some presidents being mere figureheads resulting in a lack of leadership oversight, while others Presidents are very successful in leading effective and high performing boards.
How do you ensure you are a President of Renaissance that will ensure the long term success of your business? In addition to the practices contained in the Governance Code, have a good understanding of how your business operates as well as the industry and business environment. You need to be fully engaged with the business and devote the required time and prep work before meetings. Provide support to the CEO and ensure that the Board of Directors receives quality records that enable them to make decisions quickly and efficiently. Maintain the strategic direction of your board of directors by making sure that you don’t waste unnecessary time dwelling on operational matters in the past. During meetings, you want to be a facilitator and not an expert, making sure that all directors highlight their strengths and contribute equally. Check yourself and try not to speak more than 10% of the time. Use committees wisely by ensuring that they do three-quarters of the board’s work. Lead by example and maintain your objectivity and ethical foundation, while building strong board relationships and a culture of respect, trust open dissent and candor.
Originally posted April 6, 2021
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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