Like the sun, he always rises to illuminate. Whether you are interviewing him for our first management bestseller ‘50 Nigeria’s Corporate Strategists’ (which is being reprinted) or the newest one ‘50 Nigeria’s Boardroom Leaders & Gurus’ which is almost completed, Chief Olusegun Osunkeye always rises to the occasion with the profundity of thoughts and experiential wisdom gathered from his four decades as a corporate titan and boardroom guru who took the food giant Nestle Nigeria Plc to unprecedented heights.
After his meritorious service as MD/CEO, he was rewarded with the chairmanship of Nestle board, from where he moved to lead GSK board, then to cement giant Lafarge where he retired as chairman. When you interview Chief Osunkeye on corporate issues, he reminds you of Jack Welch, Lee Iacocca, Peter Drucker or any of the global management icons with his rich insight backed with the eloquence to deliver the goods. We asked Chief Osunkeye what it takes to lead in the boardroom and he gave this “8 Rules for board chairmen” which is taken from our forthcoming book, ‘50 Nigeria’s Boardroom Leaders & Gurus’
What does it entail to be a board chairman? If the board collectively is a leader for the company, the chairman is the overall boss. As the head of the board comprising men and women, it is his duty to see that the board functions perfectly.
One, as a decision-making body of the company, the chairman is tasked to guide the board to make decisions. That in large part entails coaxing the directors to contribute to the discussions at board level. Sometimes the board is split into two halves: a group of directors that knows the subject so much that they want to dominate the topic and another who are reticent. It is the role of the chairman to squeeze out of the first group all vital contributions and to draw out the second group into the ring of discussion.
Two, it is the chairman’s responsibility, most of the time, to build consensus. Occasionally, however, the board may have to vote. Because voting can divide and even polarise board members (especially on sensitive issues), an astute chairman avoids it, and hence, bears the burden of finding an alternative way of building a consensus. He simplifies this responsibility by fostering a climate that stimulates questions and answers whereby all the expertise on the board—the lawyer’s view, the accountant’s perspective, the engineer’s insights etc.—are cast into a melting pot of wholesome debate that moves them closer to a decision optimum that all can agree on to say that: “This is the way forward given the circumstance that we have all noted.” If the going gets tough, the chairman calls for a tea break for tempers to cool and for consultations to take place. He might even adjourn the resolution till another day, if necessary. That is the core of the role of the chairman: build a team, build harmony and build consensus.
Three, the chairman, working with the company secretary and the managing director, shall draw up the agenda for meetings. However, if he does not get involved, he owes it a duty to check the items listed to verify if important issues that should come before the board are included. He has to note if an item had appeared in the previous board meeting or why an important issue is not coming on the agenda.
Four, since he chaired the board meeting, the minutes are his responsibility; to that extent he must see that it correctly reflects the reality of the proceedings, because once he puts his signature to it—after approval at the next board meeting—it is binding and taken as prima facie evidence that “the proceedings so recorded are true and factual” unless overturned at a law court by a superior argument.
Five, the chairman must impose on himself more discipline above other board members. For instance, I like that when other directors are coming in, they meet the chairman already seated. That is part of saying: “We are here to do serious business.” Serious business has its time. When a chairman does that regularly, others will take a cue that punctuality is important and they will aspire to be on time.
Six, the chairman must read and digest the board papers before going for a meeting. To him goes the onus of guiding discussions at board meetings. He cannot afford to get to an item and draw blank—same for serious-minded directors too. I can use myself as an example. It is expected that management will get the board papers out on time; in reality, management frequently gets late to the board with the papers. I had received papers at 6p.m. for a board meeting holding the next day. No matter how late management presents the board papers, even if they are up to 100 pages, I must read them thoroughly, even if I have to stay awake overnight, especially if the papers are complicated or are for the last board meeting before the AGM where we have to look at all things in totality. There are times I had gone to bed at 4 or 5 a.m. Other directors can choose to remain aloof or even occasionally doze, but it is unpardonable that while a discussion is going on, the chairman is passive because he hasn’t read the papers! For crying out loud, how does he guide the discussion? In those instances when I went to bed at 4 am, I still woke up early and as a preemptive measure, took small coffee before setting out for the meeting.
Seven, it is the chairman’s role to see that the members of the board get the needed things, board papers inclusive and, especially, correct and quality information, otherwise board matters get reduced to garbage in, garbage out. He must see to it that their welfare is taken care of—comfortable environment and adequate compensation for their work and time particularly in view of the increasing liability attached to board directorship. Board allowances, reviewed to reflect the reality of the day, must be commensurate with directors’ potentials, liabilities and the efforts required of them. The chairman initiates that with the managing director, and, of course, the remuneration committee of the board.
Eight, a chairman must protect the sanctity of the board’s authority. He should not allow it to be undermined, especially by his fellow directors. I will cite a relevant example. The staff and the management are aware the board meeting is scheduled for 11 am. While they go about their work, they see directors still coming in at 12:30 pm. What view will they have of the board? The moment their perception of the board is jaundiced, then the board’s authority is eroded. One would not be surprised when a situation warrants some provisions for the board and a member of the management challenges cynically: “Which board? Those ones just coming in at 12:30 for 11 a.m. meeting?”
If a board is seen to be rigorous, its decisions are carried out to the letter. That is power and authority. Directors do not have to exercise authority by reminding members of management and staff: “Don’t you know it is the board?” You don’t have to be telling your child at home, “You know I am your father.” Filial obligation can be compelled in a child in other ways than verbally. That is authority. To lean on people by reminding them that you have authority is to demand it; you don’t demand authority, you earn it.
Next week: Amir Shamsi, Cadbury Nigeria’s turnaround CEO