In Africa’s rapidly changing business landscape, we frequently celebrate the likes of founders who raise millions in funding, creative industry influencers who build digital empires, and industrialists who penetrate beyond their local markets. These are significant feats, worthy of emulation. However, there is another level of market leadership that I find receives limited attention in notable African markets, despite it being the backbone of the decisions that drive organizational success and its demonstrated power to shape the future of industries, economies, and communities. This is Board Directorship. As someone who serves on the boards of institutions such as the Nigeria Sovereign Investment Authority (NSIA), and several other boards in Nigeria and globally, I’ve had a front row seat in observing the positive impact of strong corporate governance and organizational strategy through effective board leadership. A McKinsey survey reports that nearly 60 percent of directors in companies with strong board processes and dynamics confirm their companies financially outperform their industry peers.
Notwithstanding this positive correlation between effective Board governance and corporate performance, I find that the women and men who spend their time in these seats aren’t often recognized for the invaluable roles they play in shaping corporate responsibility and ultimately, growth.
Why Governance Matters More Than Ever
In this entrepreneurial-driven, tech-accelerated Africa, Africa’s young people are building businesses at an unprecedented pace. But unfortunately, many of these are also failing—fast. Yes, fostering startups and entrepreneurs matter, but the backbone structure of Boards around them should matter more.
I made my first angel investment in 2017, in a female-founded business that had been operating in Nigeria’s agribusiness sector for 3 years. In spite of my excitement about backing this phenomenal founder who was building an exciting business, I laid down one condition to signing my investment cheque – the establishment of a Board. Today, this business has gone on to raise millions of dollars from institutional investors and scaled massively across Nigeria and globally.
For founders in the early days of startup building, assembling a board, even an advisory one, often takes a backseat. Founders assume Boards are too bureaucratic and will slow down their pace of delivery, placing more emphasis instead on issues like fundraising and product development. But this is not necessarily true, given Boards formats can be structured to suit the specificities of a fast-growing business that needs to be nimble. These founders also believe board directors add unnecessary costs to the business, another myth that is debunked given that boards don’t always have to be compensated. For example, Advisory Boards deliver outsized value at typically no financial cost to a business.
Ultimately, the importance of having credible Board directors should not be overlooked or dismissed, particularly at the early, formative stages of a business. In a continent like Africa, where entrepreneurship is thriving and capital is flowing at an unprecedented rate, putting in place Boards should be an imperative given the immense benefits they bring such as;
Strategic advice: Expertise from across various industry functions like finance, technology, marketing, operations, human development can be provided through a Board. Founders gain access to deep expertise, strategic and tactical advise that they otherwise may not have on their teams.
Provides Access and Network-building: Board directors often open doors to critical opportunities for an organization. From supporting with capital provider introductions, to finding exceptional talent for a business to hire, Board directors are relied upon to give unprecedented access to the essential levers of growth that an organisation needs.
Signalling effect: Conveys legitimacy and credibility to major stakeholders in the market, particularly when Board directors are influential, well-respected industry professionals.
Accountability: Keeps any CEO and team on their toes to carry out operations with integrity and diligence. Sets performance targets and monitors and tracks the achievement of these
Unfortunately, many Founders view boards as a formality to which they must adhere rather than actively participate. I’ve sat in boardrooms where entrepreneurs were unprepared, uninterested, or openly dismissive of advice. This is a missed opportunity.
I say to Founders; Board directors aren’t your enemy. They serve as your early warning system, growth partner, and legacy protector.
Boardroom Diversity as a Superpower
As much as I promote early-stage companies embracing Boards in their operational structures, it must be considered in a thoughtful way. I believe that diversity of age, gender, expertise, and background are critical to the future of African governance. We need marketers, technologists, climate experts, designers and more in the room, because the varying perspectives available to Boards determine their effectiveness.
Consider a startup that solves problems in African agriculture with an all-financier board. Who is challenging their choice of inputs provided to the small-holder farmers they work with?
Across the Boards that I serve, my perspective as a young African female financier, investor and entrepreneur, with experience across multiple disciplines and geographies, across the private and public sector, undoubtedly amplifies the levels of our deliberations. I bring perspectives that would otherwise not have been considered. I see this as a superpower, and remain a firm advocate for diversity of thought and world views to drive effective Board performance.
A Call to Action
Founders, start building your board early. Not just for compliance sake, but also to accelerate your company’s growth and ultimate survival. Look for people who will challenge you, stretch you, and hold you accountable with a firm duty of care.
To funders, insist on governance as part of your investment strategy. Nominate Board candidates who share the company’s values and add Board training and development to your portfolio companies where possible.
Emerging Board directors, begin preparing now. Learn more about effective corporate governance practices, join advisory councils, volunteer on non-paying boards to build your governance muscle.
Ultimately, Africa’s emerging corporate governance landscape is at a point where responsibilities of companies’ boards are seeing growth beyond the traditional role of oversight. Boards are branching now into involvement in critical company issues including but not limited to strategy, risk, talent development and succession planning, Environmental and Social Governance (ESG), Artificial Intelligence and digitization, and so much more.
And so Africa needs more than just unicorns to be acknowledged and celebrated. We need effective stewards of these companies to guarantee we are building success stories that last. This is what boardroom builders do. Let’s embrace them, and celebrate them too.
About
Ada Osakwe is a Nigeria-based entrepreneur and investor and serves as a non-executive Board Director on six local and international-based Boards. For over 20 years, she has developed deep expertise and a unique blend of public and private sector experiences, starting in investment banking, development finance, and private equity, before moving on to public service and then entrepreneurship. She is the founder of Agrolay, a principal investment firm that has made angel investments in 19 early-stage high-growth African companies and Nuli Foods, a restaurant chain with 7 locations in Lagos, Nigeria and Washington, D.C.
Ada is a strong advocate for entrepreneurship finance support, youth and women empowerment in business. She serves as an Independent Non-executive Director of the Nigeria Sovereign Investment Authority (NSIA), where she Chairs the Finance and Investment Committee. She is a Non-executive director on the Boards of Delta 40 (Chair), One Acre Fund (Chair); the Alliance for a Green Revolution in Africa (AGRA) (Chair, Programs Committee and Grant Review Committee); the Africa Enterprise Challenge Fund (AECF) and IMC Plantations Nigeria. She serves on the Advisory Investment Committee of the FASA fund (Financing for Agri-SMEs in Africa). She is a Senior Advisor to the African Development Bank’s Vice President, driving the establishment of the Nigeria Youth Entrepreneurship Investment Bank (YEIB).
She is also the Forbes Africa Business Woman of the year 2021, a Young Global Leader of the World Economic Forum and an Archbishop Desmond Tutu Leadership Fellow. Consecutively, from 2016 to 2021, Choiseul/Forbes Africa listed her as one of the Top 100 Africans contributing to economic impact on the Continent. She has also been a recipient of the Entrepreneur of the Year and Achiever in Agriculture Awards and was on the Forbes 20 Youngest Power Women in Africa list.
