The Institute of Corporate Governance of Uganda (ICGU) has organised the first Corporate Governance awards that will take place on 17th May 2018 at Kampala Serena Hotel. This is one of the key milestones happening in the country. We will be celebrating the best corporate governance practitioners.
As the secretary of ICGU, corporate governance is key to a company’s success. Any organisation in Uganda must participate because it is an opportunity to put your corporate governance practices to the test. There are so many organizations that have put boards in place but are doing things which do not necessarily add value to the business. When you subject your board to the processes of this award, the Panel of Judges which is composed of experts in corporate governance, will provide a check list against which your board is evaluated. Your organization will have insights into what good looks like.
Knowing the Prince IV corporate governance best practices is one thing. Putting such practices into action is another thing altogether. The ICGU CG award helps to bridge the gap between what is written and what is in practice.
We don’t want organisations to have window dressing boards. Very many things go wrong with incompetent boards. In politics, you will ask; “Is our parliament actually a ‘biting’ parliament?” Can Parliamentarians put their feet on the floor and say no to the executive? If they can, then that Parliament is ok, because it is independent of any influence.
Like a good parliament must check the powers of executive, a good board must be beyond influence by any senior executive member. However, if any resolution the executive wants finds it way through the board and it is approved, may be something may not be fine. Remember, the board is appointed by the owners of the business to represent their interests. Just like the parliament is elected by the citizens to represent their interests. If anything, the executive wants passes through, the parliament is window dressing. To the outsiders, Uganda is well governed because it has a parliament. Yet actually in reality, the parliament may not stand on its foot to make the right decisions for the people of Uganda against personal interests of other people especially the executive.
In a typical family owned business or SME, you find the owner of the business is Managing Director, he is the one appointing the board and he is the board chair.
The entire three levels of separation of control are fused in the role of one person. It becomes very difficult for this person to step aside and look at the board independently. Your voice is at the owner level, chair of the board and executive level in management as the managing director. You are always going to be listening to yourself. Corporate governance fails.
That is why politics in developing countries fail: one person at the head, oversees the parliament and the executive (public service). At the end of the day, there is no independence.