5 minutes

Member of the Board of Directors

Muhammad Salem Al Ali

05 May 2022

Although contemporary corporate governance systems had begun their concrete steps at the beginning of the 21st century, they have not yet succeeded in avoiding administrative failures that led to many global corporate scandals and economic failures.

Even if the institution enjoyed the best governance in terms of structure and organization, or collected in its boards of directors the most successful members at the individual level, its fate may sometimes be disability and disappointment when its board of directors suffers a serious defect in the way it works.

In order to understand this issue, we must realize that what is going on in the meeting rooms is actually the result of the interaction of three aspects. The first is the corporate governance structure and its organizational structure, the second is the members’ culture and level of expertise, and the third is their personal behavior and character.

The defect in any of the parties to this equation may lead to results and repercussions on the company and the institution.

The major problem facing this equation does not lie in the laws of institutional governance as much as they are hidden in human nature itself.

Boards of directors are generally made up of VIPs and businessmen who are always accustomed to leading the team and making decisions, and therefore it is difficult for them to accept being equal members of it;

Also, many of them may agree to join councils not because it suits them, but out of their desire for volunteer work and community service;

Or in pursuit of specific goals and agendas, such as the desire to control the institution, for example, or direct the agenda towards certain issues, not to mention those inexperienced members who are appointed or elected without having any sufficient knowledge.

On top of this also comes the weak chairman;

Which is an accelerating factor for the emergence of dysfunction, because then the members will engage in struggles over the position, and lose their focus on the institution and ensuring its success.

All of these factors negatively affect the performance of the board. Immature behaviors appear in the meeting room, such as anger, blame and making excuses. Selfishness and a tendency toward control prevail. Active participation is absent and meetings are missed. Members slacken and ignore their obligations. Conflicts of interest appear as an influential factor in decision-making.

As for the team spirit, it disappears completely, and with it the responsibilities and credibility of the Council vis-à-vis the rest of the investors and the other components of the institution.

Studying this reality leads us to extrapolate some solutions and test their validity.

When selecting the members of the board, it is necessary to take into account their possession of the knowledge and experiences that are compatible with the size of the institution and the nature of its activity. The same applies to the chairman of the board of directors, who must also be distinguished by the fruitful relationship with all other members.

Also, corporate governance, although it guarantees the existence of a clear and agreed-upon line at which the responsibilities of the Board of Directors intersect, but its proper application requires more reviews and mechanisms aimed at strengthening team spirit, encouraging mutual trust, and adopting open discussion as a way towards managerial maturity.

Perhaps the cornerstone here is continuous learning. Councils that do not provide learning capabilities waste opportunities and reduce the effectiveness of their members.

Therefore, what is required is the adoption of specialized training programs, conferences and seminars that train board members, not only on governance and organizational skills, but also on personal and cognitive skills, all within a system of continuous evaluation in which the elements of behavior and personality are integrated along with performance and other functional components. .

* Founder of Suhail Smart Solutions

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