• November 29, 2022 11:48 pm

Board of Directors wake up and do your job in clearing the rubble 

Mar 9, 2022

By Malawi Exclusive Business Editor

All fingers have pointed to Malawi President Dr Lazarus Chakwera and Chief Secretary Zangazanga Chikhosi of being slow in clearing the rubble. Let us ask ourselves few questions on who is supposed to clear this mess standing tall blocking development.  I will take you to the subject of Corporate Governance which helps to clear demarcations on roles of different managers in Corporate world. 

Background

After World War II, the United States experienced strong economic growth, which had a strong impact on the history of corporate governance. Corporations were thriving and growing rapidly. Managers primarily called the shots and board directors and shareholders were expected to follow. In most cases, they did. This was an interesting dichotomy, since managers highly influenced the selection of board directors. Unless it came to matters of dividends and stock prices, investors tended to steer clear from governance matters (Nicholas J. Price). 

In the 1970s, things began to change as the Securities and Exchange Commission (SEC) brought the issue of corporate governance to the forefront when they brought a stance on official corporate governance reforms. In 1976, the term ‘corporate governance’ first appeared in the Federal Register, the official journal of the federal government.

Since then Corporate governance has  become the subject of debate worldwide by academics, regulators, executives and investors.

Current situation 

On 7 Jul 2020 , Malawi’s State President, Dr Lazarus Chakwera said and this was at Kamuzu Baracks during his inauguration, it is time to clear all the rubbles that Malawi has been engulfed in for almost 26 years. In Corporate Governance that was an order to all managers to do their jobs. The President showed political will and vision for development to take place. 

The President cannot be personally going door to door checking for these rubbles cadets in their offices. That is why he appoints Board of Directors. Now if Malawi Government is having cadets enjoying and sabotaging Government business its not the President of this country but rather board of directors who have such duties before them to fire and hire. 

THE ROLE OF BOARD OF DIRECTORS 

A board of directors or governors denotes a panel of people who are nominated to represent shareholders or owners of any business/enterprise/corporation. Every public company is also legally required to put in place a board of directors; nonprofit making organisations and many private companies/businesses which are supposed to apppint one for efficient and effective running of their business.  

The board has many functions which we cannot discuss here wholesome. But we will foxus only on two. 

Firstly, the board is there to create conditions for developing a sound business strategy in consonance with national development plan and objectives. Every company has to run a legally accepted business in conformity with the development goals of any country. For example, in Malawi we have the Malawi Growth and Development Goals (MGDS) which are also aligned to the Sustainable Development Goals worldwide. Now if these State companies are failing to make profits, then the ones to blame are the Boards for failing to put in place workable strategies.

Secondly,  the boards are mandated to discipline senior executives (especially the CEO). In ensuring that the enterprise has a CEO of the highest caliber, senior managers are being groomed to to become the CEOs in future. 

Conclusion 

In conclusion the President did his part in clearing the rubble. So it is the responsibility of all managers to ensure that the rubble in various Ministries Departments and Agencies. No one should be seen sabotaging government.

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