‘How to boost corporate governance with boardroom composition’
To enhance corporate governance practice in both listed firms’ and financial institutions, KPMG professional Services have stressed the need to align boardroom composition to company’s long term strategies with integrated approach to structured succession planning.
Rising from its recent survey on ‘Building great board’, the company submitted that important mechanisms that are needed to maintain optimal board composition are underutilised, just as only few boards have formal succession plan in place despite its wide recognition as a major factor in achieving ideal board composition.
The boardroom members in any establishment, apart from the skill and expertise they bring to strategy formulation, they equally ensure that the internal control mechanisms, especially corporate governance issues are effective to assure owners that the company objectives will be achieved.
When boardroom composition is aligned to company’s long-term strategies, the firm attracts more investment, raises funds and strengthens the foundation for company’s financial performance.
Speaking at a press conference in Lagos, the company submitted that given the demand of the ‘todays’ volatile business environment with increasing scrutiny by investors, a critical priority for every board is to align boardroom talent with firms’ short term and long term plans.
Specifically, the Partner Board Advisory Services of the company, Tomi Adepoju, explained that selecting the right boardroom members that would help form company’s strategies are becoming big issues in Nigeria.
She pointed out the result of the survey showed that many Nigerian companies must focus on improving board composition in the areas of competence, skills and behavioural dispositions
“The result of this survey cannot come at a better time than now. Only 33 per cent said they are satisfied with their board composition; there is a wide gap between what we have in present and what the living governance practice is.
“In Nigeria, there are occasions where the regulators have to come in to dissolve some board members. The composition of board is where a lot of companies in Nigeria need to focus on.
“The companies are required to do certain things to improve the composition of board in Nigeria like looking at the current composition and doing a benchmark to company’s strategy: what kind of skill set, the emerging issues in the industry to influence the skill set.”