Dada Adefolami

Corporate governance
Corporate governance can be defined as ‘the policies, controls and processes that will help ensure that organizations are run in a responsible, guided way and are not driven off course in risky and damaging ways by sectional or personal interests and ambitions’.

Corporate governance grew up after the Enron disaster with the Sarbanes-Oxley legislation in the US to try to restrain rogue boards and CEOs. This was accompanied, particularly in the UK, by more voluntary codes of practice – e g, encouraging the appointment of non-executive directors to act as checks and balances against concentrations of power. But the question remained as to whether these processes were both necessary and sufficient to ensure that governance was duly executed.

The problem lies at least partly elsewhere: that it is all too often subverted by one or two key individuals who become intoxicated by a wicked cocktail of greed, power and accomplishment – often fueled by ego. They are often pretty and may have got addicted to gambling with the business.

Such individuals, are particular psychological types. This is the root cause of much of the problem and these accidents will always keep on happening if we not address that.

Frankly speaking, when individuals come up through the organization with huge drive and are very bright they can carve a path through it with some charisma. Instead of weeding out such unstable people, the HR department may actually applaud their pushiness, those who have floated around the top in corporate life have usually come across one or two such characters.

Finally: Beware of thinking that checks and balances will always be effective – they may not be. The most important aspects here are behavioural and not processes. Try to apply team management process by:

1. Assignment leaders can often get blinkered and focus only on the task or the task and the business relationships. Remember that for this particular assignment, you have a team to manage and you must find the time and techniques to manage them well. Get a personal objective on this
2. Don’t just manage the team as a team; also manage its individuals as individuals with different motivations, skills, experience and expectations. Not everyone feels valued in the same way. Find out what makes each individual feel valued and what motivates them
3. Although you have ‘power’ invested in you as assignment leader, this won’t explain why people will ‘follow you’. People will work well if led well, not because their assignment leader gives them orders about what they must do
4. Make it clear to the team that you have overall responsibility if the assignment isn’t successful. Also make it clear that success belongs to the team as a whole
5. The team needs to understand what you expect of them, but don’t forget that you need to know what they expect of you
6. Getting the team together is important, but that doesn’t necessarily mean they’re physically together in the same room. Make use of videoconferencing, teleconferencing and email updates
7. Make it clear to the team that your ‘door is always open’, that you’ll make yourself available for them and that you’ll support them. Then actively demonstrate that you do this. Actions speak louder than words
8. Admit to your own mistakes, apologies and explain how you intend to put things right. People will only be open with you if you’re open with them
9. People need to feel empowered. Explain the empowerment they have on their element of the assignment. This will typically include: 

A. the assessment of the adequacy of controls in place to manage the risks identified; 
B. the decisions on what testing should be undertaken; and 
C. the decisions on what findings should be raised. 

10. Juggling the needs of the individuals and the team as a whole is a very difficult balancing act. Just do your best as everyone will probably have a different view of how well you’ve done

11. Keep everyone involved throughout the review. How’d you feel if you didn’t know what issues were raised or what the assignment opinion was?

12. ‘Chunk’ feedback from the quality review. It’s demoralizing to get 10 review points that all highlight the same principle. Don’t forget to feedback on what went well
13. When giving feedback on behaviours, say what you observed or heard and how it made you feel. This is factual and doesn’t attack the person’s ego
14. Actively give credit to individuals for their ideas, opinions and findings
15. Say ‘thank you’. And don’t forget to celebrate a successful assignment

If you are looking for a new appointment, look beyond the formal processes and to the leadership and the agendas of the organization before you take a job there. Otherwise you may end up being asked to look the other way – or find yourself out

Note that development economics is a branch of economics which deals with economic aspects of the development process in low-income countries.

Socioeconomics (also known as socio-economics or social economics) is the social science that studies how economic activity affects and is shaped by social processes. In general, it analyzes how societies progress, stagnate, or regress because of their local or regional economy, or the global economy.

• Dada Suraju Adefolami, Professor of Finance, School of Business Administration, UNEM University Costa Rica, is a Finance / Management Consultant and Certified Forensic Accountant. You can reach him via: [email protected]; 08052043855