AN Administrator, Dr Nosike Agokei on Wednesday advised firms to continually evaluate and appraise board members to avoid corporate failure.
Agokei gave the advice at the 2018 Roundtable on Corporate Governance organised by the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) in Lagos.
The theme of the roundtable was: “Board Evaluation and Succession: The antidote to corporate failure.
Agokei said the advice was necessary because the success of an organisation might not be due to the efforts of the current board but the decisions taken by a previous board.
“As a result, periodic board evaluation and assessment must be carried out to ensure that set organisational goals and objectives are met and exceeded despite challenges companies face.
“The effectiveness of a board is dependent on its structure, composition, constitutions, and diversity, monitoring of policies and strategy implementation systems.
“Corporate failure may be caused by a number of factors, ranging from mismanagement, technological issues, capital problems, fraudulent management to poorly structured board and poor organizational structure.
“These factors lead to increase in the level of unemployment, decreased standard of living, underutilisation of resources, increased crime rates and instability of financial markets.
“As such, outcomes from evaluations must give rise to amendments of board processes, compositions and alterations in committee structure to rectify factors that contribute to board dysfunctionality,” Agokei, who is a professional board evaluator, said.
He enjoined organisations to review rules and requirements, which a board was subject to in succession planning.
Mr Samuel Kolawole, President and Chairman-in-Council of ICSAN, said creating a board and getting the right people was like admitting fresh students into an institution.
“Just as students have to be evaluated from time to time to assess performance, the same is to be done with board members of any organization.
“Board evaluation is important because a board can be made of persons with brilliant qualifications that should naturally assure the success of a business.
“But due to some certain factors, many lose sight of their capabilities in the discharge of their duties,” he said. (NAN)
– May 16, 2018 @ 15:45 GMT |