Board Structure

& Operations

Directors Duties
& Oversight
Responsibilities
PART 1 22DULE 1
27 October 2021
Board Structure & Operations
Directors Duties & Oversight Responsibilities
18 MAY 2023
 Welcome & Introductions
 Your name
 Organisation
 Your expectations from this course

2
 Presenter
Dr. J.D. Nhavira
+263777609492
johnnhavira@gmail.com

3
Module Objectives

By the end of this module, participants will be able to:


Be familiar with governance and board operations.

Define the difference between Governance &
Management

Appreciate how boards are structured

Understand their duties and oversight roles as
board members.

4
Agenda
Overview

Introduction to Governance Issues

Governance versus management

Board Structure

Directors duties
Oversight Roles

Board Practices

Characteristics of Effective Boards

5
What is a Corporate ?
• Corporate has come to refer to a
group of people that can be treated
as a single entity for administrative
purposes.

• A corporate can be a for profit or

non-profit.

6
Corporate Governance

According to OECD, Corporate Governance is

the system by which business corporations are
directed and controlled.

7
 MY DEFINITION

• Corporate governance is the adoption of best

management practices, adherence to ethical
standards for effective management, discharge of
social responsibility for stakeholder sustainable
development, and ensuring diligent compliance
with the law in letter and spirit.
• -JD Nhavira
 Overview of Corporate Governance
 Boards are responsible for the corporate
governance of their organisations.
 Governance standards vary from one
organization to the other.
 Strong organisational performance has been
linked to good or effective corporate
governance.
 Corporate governance is now a significant
factor in making investment decisions.

9
Key issues in Corporate Governance

 Oversight issues

 Board Members’ independence

 Role of both internal and external auditors

 Conflict of Interest – The Agency problem-monitoring, contractual

incentives, soliciting the aid of third parties, or relying on other price
system mechanisms.

 Effectiveness of board committees

 Ethical compliance
10
 Governance vs Management
Governance Management

Guiding Management Controlling staff

Strategic Planning Strategy implementation

Resource mobilisation Resource allocation and usage.

Approval of plans and policies Preparation of plans and policies.

11
Types of Companies
• Limited or
Unlimited

• Limited by shares
or by guarantee

• Private or Public

• Listed or Unlisted

12
 Board Structure
The structure of the Board is
determined by such factors as
:
 organisation’s size.

 skills set required.

 business model.

 nature of operations.

 regulatory requirements.

 corporate risk profile.

13
Types of Board Structures
Traditional Structure
• Board governs and delegates operational management to
executives
Management Structure
• Board governs and manages operations through a delegated
authority.
Operations structure
• Board is responsible for governance, management , and
supervision of day-to-day activities but delegates this to
managers.
Advisory Structure
• Board is selected by CEO or Founder. Its role is to legitimize the
activities of the organization especially where board structure is
mandatory.
Collective Structure
• The board & staff make joint decisions on the running of the
organisation.
14
Board Structure

Shareholders

Board Board of
CEO
Secretary Directors

Board Management &

Committees Staff

Remuneration /
Governance &
Finance Audit Risk Human Operations
Nominations
Resources

15
Board Operations

The Board’s role is to provide

leadership of the corporation and is
responsible to the shareholders for
its long term success.

16
Board Chairperson
• Acts as a liaison between Shareholders ,
Management and the Board
• Provides independent advice and counsel to the
CEO.
• Coordinates the activities of all Directors in the
interest of the organization.
• Sets the agendas for meetings of the Board in
collaboration with the CEO.
• Chairing all meetings of the full Board.
• Reviews and signs minutes of all Board meetings

17
Board Secretary
Board Secretary assists both the board and management
with implementation of good corporate governance. This
entails the following:
• Facilitate communication between board and
management.
• Ensure that matters requiring board consideration and
approval are brought before the board.
• Assisting or Facilitating induction programmes for new
directors and board performance evaluations.
• Manage the company’s relationship with shareholders
and institutional investors.
• Provide advise in the best interest of the organization.

18
Chief Executive Officer
• To act as a liaison between management and the Board.

• Lead the development of company strategy in collaboration with

the Board.

• To ensure adequate information dissemination to support board

decision making.

• Support the Chairperson in organizing the Annual General Meeting

of shareholders and to developing the agenda for the board
meetings.

• To sit on committees of the Board where appropriate to provide

required information.

19
External Auditors
These serve as external validation for
accountability and transparency. Their role
is to ensure the following :
• Protecting the interest of shareholders
• Ensuring that the board receives
accurate and reliable information.
• Assist with Risk assessment and
mitigation.
• Assist the organization with compliance
issues.
20
Directors Duties

• In Zimbabwean context , these are articulated

through the Companies Act.

• Different countries have different frameworks that

determine the duties of Directors.

• There are slight variations of the duties across

countries as some duties are universal.

21
Directors Duties
 Represent shareholders and create
shareholder value.

 Establish and approve organisational strategy.

 Defining the organisation’s mission and goals

 To promote the interest of the organisation.

- Avoid and eliminate conflict of interest .
22
Directors Duties

 To exercise sound business judgement.

 Commitment to the business and activities of the

organisation.
• Protect assets of the organisation
• Protect sensitive business information
• Promote the business of the organisation.

23
Directors Duties

 Appointment of organisational executives.

 Overseeing organisational performance.

 Ensure corporate compliance with legal ,

regulatory and professional standards.

 Guiding the organisation’s investment and

financial activities

24
Board Oversight Role

• Governance

• Financial Management

• Effective Leadership

• Risk Management

25
Board Oversight Role
Governance
• Determining the organization’s
mission, purpose, and structure

• Planning for the organization’s

future and strengthening its
programs and services

• Ensuring compliance with legal

and regulatory provisions

• Approving policies.

• Ensuring implementation of By
Laws , Board Charter and Ethical
Codes.
26
Board Oversight Role

Effective Leadership
• Ensuring alignment of organizational
activities to its mission.

• Giving direction on complex issues.

• Executive appointment and succession

planning

• Staff oversight , compensation and

evaluation.

27
Board Oversight Role

Financial Management

• Ensuring adequate
financial resources

• Facilitating access to and

ensuring effective and
efficient management of
key resources.

• Ensuring that there are

proper financing controls.

28
Board Oversight Role
Risk Management

• Risk profiling ,mitigation

and control

• Ensure internal and

external audits

• Disaster recovery systems

• Media and publicity

management

29
What then is not the Board’s Role

• Being involved in the day to day running of the

organisation.

• Deciding on every company expenditure.

• Being involved in operational decision making.

NB : There is a distinction between Board and

Management roles.

30
Avoid these Board Syndromes

• Don’t Rock the Boat

• Us versus Them

• Non-system
Thinking

• Boiling Frog

31
Good Board Practice on role
Execution

• Focus on the important issues

• Use appropriate tools

• Collaboration

• Mutual respect

32
 Call to Action
 What things have you learnt that you
will implement on your board role?

 What have you learnt that need to

avoid moving forward ?

 How are you going to manage

implementation of changes you have
now realised they need to be made ?

33
Questions

34