Experts say skills not prominence, for board of directors

Experts  have recommended the  enactment of policies that require both public and private entities to have qualified personnel on their boards to avert corrupt tendencies, poor governance and mismanagement of corporations.

Speaking during a media briefing on Monday, the CEO  League of East African Directors, Phiona Nabasa Wall said in the recent past, corporate entities have been appointing board members based on their prominence and influence, factors she says have led to their collapse.

“In the corporate world there used to be a tendency of appointing board directors because of their prominence and influence but very little because of their skills. However right now, the standard of judging directors is no longer those factors. The standard now is one of a skilled and knowledgeable individual,” Wall said.

“That’s why Bank of Uganda released regulations now that to sit on an audit committee of a bank and chair it, you have to be a qualified auditor and chartered accountant. These are things that are increasing the liability of directors.”

She noted that more regulations are required to compel organizations appoint qualified individuals to run the boards.

“Non- executive directors are unthanked, never paid and have no stake in company and yet the level of liability for the decisions they make is high due to the increasing regulation. We have seen how poor governance has done to institutions. We should not forget that if we don’t prepare for success we are preparing ourselves for failure.”

According to officials, this issue will be one of the major focuses of the third annual LEAD organised by the League of East African Directors (LEAD), under the theme, “Boards of the future: Fostering resilience in an uncertain world”.

The convention is set for July, 25, 2024 at the Kampala Sheraton Hotel .

Phiona Nabasa Wall, the Executive Director at LEAD, says that governance issues like misappropriation and corruption are sometimes not because of intention to commit an offense, but out of the lack of skill or preparation for a task.

“This convention is open to everyone and an opportunity for unlearning and learning new things. It is an opportunity for people to open up as sometimes it could be a case of finding corruption in an institution and thinking it is the norm. We want to find better way to drive good governance. It is open even to the public sector. We won’t say in itself, the convention will stop corruption in Uganda but it is a step in the right direction.”

Anne Marie Mwaka, the Business Development Head at aBi Finance Ltd, a company involved in the training of the financial sector operators in ESG issues, said it is important to also empower those in positions of responsibility on what good governance is and what it entails.