Before you join any board, ask yourself “Why?”
“The first step in ‘getting on a board’ is to ask why you want to be on a board. If the answer is for self-aggrandizement or prestige, the reputational risks today far outweigh any such benefits. Similarly, if it is for financial reward, there are easier, less risky ways to make money. If it is because you have a ‘cause’ to promote, you are clearly not a good board candidate because your role as a director will not be to represent a single interest but to represent the interests of shareholders as a whole.”
NORM AUGUSTINE, quoted in Directors & Boards (November 2009)
Norm Augustine is a veteran of 500-plus meetings of Fortune 100 companies. He recently received a lifetime achievement award in recognition of his services for the improvement of corporate governance practices. His very wise advice to those who want to join boards: first ask yourself why on earth you want to do it at all.
That is not advice that will resonate with wannabe board members in Kenya. Kenyans of accomplishment make a career of joining other people’s boards. If the organisation inviting you is reputable the decision is usually a no-brainer. It is an honour to be asked, so you just say yes. It will boost your reputation to be at the helm of worthy entities, so you just say yes. You might make some money out of it, from directors’ fees or from making powerful contacts, so you just say yes. You might gain the power to further some of the causes in your life, whatever they are, so you just say yes.
Well-known Kenyans just say yes, so they sit on multiple boards – sometimes a dozen or two – in addition to having their own businesses or jobs. How they add any value to those boards is a mystery. It is not actually physically possible to attend that many board meetings or immerse oneself in the details of that many enterprises. And so we have the spectacle of the director who cruises into a couple of meetings a year having not even glanced at the papers, drops a few generic pearls of pseudo-wisdom, and cruises out.
Take Augustine’s advice, and ask yourself “why” before you say “yes.” As he points out, there are huge costs to being a director these days. Beneath all that surface cruising you do, a very serious corporate scandal may be brewing in the organisations which you purportedly direct. When the waste matter hits the fan and you face the consequences, you are very likely to regret thoroughly your decision to join.
Even if you are not accosted by scandals and scams, you may be associated with business failure. I have watched many talented individuals carry the cross of others’ mistakes, simply because when corporate incompetence is exposed, the public’s natural reaction is “Where were the directors?” When you are handling too many boards, your grasp of the details that matter is going to be slippery at best.
Do you still want to join? Actually, there are good reasons to join a (very small) number of boards. Join if you feel a passion for the company and its brands. Join if you want to apply your knowledge and expertise to good effect. Join if you are able to maintain a non-partisan, independent perspective that protects the interests of all shareholders. Join if you will relish the chance to understand an enterprise from a special vantage point, and add value to its decision-making. Join if you are going to be committed and interested. Join if you wish to do some good and build robust institutions for the future of Africa.
If you didn’t find a good and genuine reason in that list, however, do yourself and everyone else a favour, and don’t join.