By Marios Siathas*
In any organization the Directors and the Board need to provide the leadership and accountability that determine the future success of the organization. Directors, are under a great pressure, and in many cases suffer from stress and an out of balance work/home life. Directors undertake a major role that includes many responsibilities; many of these responsibilities are enforced by regulators whereas some are imposed by the stakeholders of the organization they are asked to lead.
In cases of newly appointed Boards, were each member brings along their unique and individual competences, the team dynamics of the board are essential appropriate mechanisms need to be in place to ensure board effectiveness from the start. Professionalism in the boardroom plays a key part in the prosperity of any organisation.
The need for sound Corporate Governance
Cyprus’ bid to become a leading global financial and business hub dictates it must develop, adopt and promote internationally tested best-practices in corporate governance within its companies. In addition, institutional investors, both local and international, would rather establish business relationships and invest in an economy where good corporate governance is important before making an investment decision.
The Need for Director Training and Development
- A Board is the apex body collectively responsible for corporate governance and success of a company
- An Effective board is central to good governance
Skills, knowledge, mix and independence of directors central to board effectiveness
- Increasing demands on boards and individual directors
- Board committees required by law
- Investor trust
- Skills/knowledge levels among directors and standards of corporate governance vary considerably
- Concerns on director skills and independence
- Compliance with regulators
Features of an Effective Board
- Have relevant collective skills, knowledge, and experience
- Work cohesively as a team
- Have sufficient degree of independence and integrity
- Be prepared to devote sufficient time and resources to the affairs of the company
- Can provide the strategic and entrepreneurial leadership to the company
- Have a comprehensive and formal director induction programme
- Have a programme of continuing professional development for directors
- Have formal board performance evaluation and individual director appraisal
- Have well defined plans and processes for board succession
For the organization individual directors and collectively as a board effectiveness and overall results are important. Organizations need to ask the following questions:
- How effective is your organization’s board?
- What do you do to select and induct new directors and what do you do to maintain ongoing development?
- Have you recently undertaken an audit of board processes and behaviors?
- How do you appraise directors – both executive and non-executive?
- Do you have a director development programme?
The European Institute of Management and Finance (EIMF) is committed to providing learning opportunities for directors. Training and development of individual directors and the board as a whole is an important investment for any organisation that intends to operate at its greatest effectiveness. Find out about the EIMF Director Development Programme http://eimf.eu/directors-development-programme/ or call at 22274470 for more details.
(*) Marios Siathas is General Manager, European Institute of Management and Finance (EIMF), Member of the Board, Institute of Directors Cyprus Charter.