The roles of the chair are numerous and sometimes, industry specific. However, some general and pivotal roles include:

Knowledge of the Core Business
The days of appointing individuals with a good heart and no skill as chair of a board are long gone!!! The chair must have a functional knowledge about the core business of the organization. Staying current and informed on factors that could impact the organization through networks, memberships and subscriptions across a wide range of areas, will assist the chair in leading and contributing contemporary knowledge to the decision making process.

Meetings
He prepares for and presides over Board Meetings. He ensures the agenda for each meeting is robust and allows for discussions in relation to the organization’s culture and its drivers; staff presentations, client stories/ testimonials, site visits, surveys, reports on turnover and complaints etc.

Managing Conversations
The chair handles and undertakes difficult conversations on areas that could affect the business of the company. For instance conversations on performance evaluations of the CEO or a board member; conversations between various stakeholders and the differing interests they represent etc. This is a difficult, but significant role of the chairman and his ability to function without bias aids in his discharge of this role.

Training
He guarantees the effectiveness of the Board by ensuring that induction trainings are conducted for new directors as well as continuing education trainings and workshops for all other directors

People Management
The chair manages and draws on the diversity of the board, for the benefit of the organization. He does this by exploiting the individual strengths, experience and know-how of all directors. This allows for quality decision making as issues are explored through multiple perspectives.

The appointment of the chairman of the board is a pointer to the overall success or otherwise of the organization.

Every successful company is headed by a functional Board of Directors. The Board serves as a link between the various stakeholders (such as shareholders, competitors, customers, regulatory agencies, creditors, employees) and the company.

The key responsibilities of the Board include:
a. Providing strategic leadership on the core business of the organization;
b. Promoting ethical culture in the organization;
c. Exercising oversight and control by ensuring that management acts in the best interest of the all stakeholders on the one hand, whilst sustaining the prosperity of the organization on the other hand.

For the Board to effectively undertake its key responsibilities, there must be a perfect blend of the appropriate skillset, diversity (gender, experience, technical know how), competence, independence and integrity on the Board. High functioning Boards are literally a wealth of experience in various walks of life that often transcends the core business of the organization.

Therefore, when looking to setup an organization or revamp an already existing one, the very first focus should be on the structure of the board.
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Since every company has its goals, it therefore becomes expedient for these individuals who have been brought on board to be properly indoctrinated. This is done through a Board Induction Process. The Financial Reporting Council of Nigeria, on 15th of January, 2019 released the Nigerian Code of Corporate Governance, 2019 and this code specifically provides for a board induction**.

A well-designed board induction process will help to ensure that new board members are aware of their roles and responsibilities as well as understand the company’s objectives and operations. It will assist new board members to more easily grasp the processes, procedures and aims of the company, which will, in turn, boost their confidence and decision making.

Truth be told, every new board member has the same concerns about wanting to fit in and to be respected. New members can be reluctant to contribute until they feel they know more and are better acquainted with their colleagues. First impressions count and new members do not want to appear brutish by asking ‘foolish’ questions or making ‘dumb’ statements. On the other hand, the energy and idea new board members can potentially inject into the system are unparalleled. The board gains a vital and valuable opportunity to benefit from the new members’ fresh perspectives. The trick is- the time before they learn the culture and social norms of the board and come to accept same assumptions about the way the company operates is a classic ‘window of opportunity’. Even one new member at the board table can significantly alter the social dynamics, strategic thinking and decision-making ability of the board. All these and many more underscores the importance of an effective induction process.

An effective board induction process will include discussions on the following:

1. History and traditions of the company including its ownership, discussions on mission and vision statements, ethics, value and philosophies of the company;
2. Company’s operations and facilities with provision for a tour of the site; introduction to key management staff as well as terminologies, jargons and glossaries of company-specific terms;
3. Core governance issues such as board structure and functions, board philosophy and vision for the company, committee structures, rules governing conflict of interest, risk policies, code of conduct, whistleblowing policies, finance and audit, performance evaluation procedures, allowances, etc.;
4. Board administration procedures, programs, information and contact details for other directors, meeting arrangements and schedules;
5. Provision of key board and company information such as copies of minutes of previous board meetings, Board manual, financial structure and recent financial reports, strategic plan and organizational chart of the company.

The need for a board to function as a team can never be overemphasized. Therefore, having some members of the Board who do not feel like part of the team might impact badly on the effectiveness of the board. The new board members may be “green” but they will still have a vote – and it is in the best interest of the company for the new members to know what they are voting on. An induction process will also help to ensure that the new members on the board can easily have a grip on the objectives of the company which will in turn help to boost their confidence. The earlier the new members of the board become comfortable within their roles, the faster they contribute meaningfully to the decision making process.

As the neurologists say, time is brain- therefore, recommended practices provides that the induction of new directors should take place as soon as feasible, after their appointment. It is best to strike while the new members’ enthusiasm is at its peak. Confirming an appointment and then cutting the appointee adrift for several weeks or months will most probably leave a bad taste in their mouth – and a feeling that maybe their services are not so in demand after all. Care must be taken however to ensure that the inductees are not bombarded with too much information all at once. The process must be done systematically and a drip-feed approach can be introduced whereby they are given time to digest and make meaning of the various information received. It must also be noted that the induction process should be at the Company’s expense but care must be taken that undue strain is not placed on the company’s finances. It is not how expensive, but how effective.

Boards generally suffer from inadequately conceived and poorly implemented induction processes. An effective induction process addresses, directly or indirectly, several problems that may only surface many months after a new director has joined a board. A well designed and explicit induction process should be a signal to the board that things are not as they were- a new team is in place and the board as a whole now has to re-form its thinking and approach.

*This article forms part of the Corporate Governance Series powered by Eunoia Law.

**Principle 13 of the Nigerian Code of Corporate Governance, 2019states that a formal induction programme on joining the Board as well as regular training assists Directors to effectively discharge their duties to the Company.

In this era of startups and disruptive technology, the frontiers of the business-scape are being extended minute by minute and what can ensure that these businesses survive and thrive is healthy corporate governance practices.

There is a dearth of information to help businesses, especially startups, formulate and adhere to good corporate governance practices. This is why Eunoia Law is introducing the Corporate Governance Series (© CG Series). This Series will focus on best practices in Corporate Governance and we will be sharing laws, principles, tips, news, best practices et al in Corporate Governance for businesses to be informed and stay compliant.

Watch this space.