By Onesmus Keudaneko Joseph
Change remains the only constant force shaping businesses, and I can assure you; it will continue to profoundly impact both companies and individuals.
Today, I want to highlight the critical evolution needed in board composition for corporate governance to remain dynamic and fulfill its ultimate purpose. Once considered the lifeblood of business much like water to a plant; the application of governance practices will soon loss its purpose, if nothing is done.
Tracing back historically, corporate governance gained prominence and became formally practiced in the 20th century as a calculated response to corporate scandals and financial crises.
Globally, governance frameworks were developed to guide how firms and organisations should be governed to achieve desired outcomes such as good performance, ethical culture, legitimacy, and trust among others.
In Namibia, the commonly known governance frameworks include the Companies Act, the Public Enterprises Act, the NamCode, and, by extension the King IV for listed companies. At the heart of these frameworks, the composition of the board of directors or governing body if you like is crucial.
However, if you are familiar with the Namibian corporate governance landscape, you may have noticed that recruitment of Board Members traditionally follows a generic formula, prioritising expertise in finance, legal, human resources, information and technology as primary skills for board composition.
Yet, given the dynamic nature of the business environment, shouldn’t global forces compel a shift in board composition to ensure dynamic capabilities, just as seen in other areas of business?
While the adopted competencies offer stability, stability alone does not guarantee survival. Therefore, the exclusion of strategy as an essential expertise within board composition couldn’t go unnoticed by those of skilled in the art. With technological disruption, shifting consumer preferences, and economic volatility are classic characters of the current era; strategy is no longer optional; it is a must-have skill for any board.
Current boards are composed of experts who can only manage what exists today but lack the strategic eye to shape what should exist tomorrow. Strategy in essence is not just about planning; it is the ability to make choices that are informed by the future.
It is an art of engaging the future to inform today’s decisions. Failing to embed strategy at the core of governance has and will continue to cost companies not just market share but, in many cases, their very existence. Without strategic foresight, firms risk becoming reactive rather than proactive, merely responding to change instead of shaping it.
The absence of strategic foresight in governance has left many companies vulnerable. If you have been around long enough like me, you may have witnessed the consequences firsthand.
A perfect example is Air Namibia, once the national pride, struggled to operate efficiently in an era where airlines optimised for cost reduction and streamlined operations. Instead of adapting, it continued to run an outdated model that led to its demise.
Think of MultiChoice’s DStv, once a dominant force in African entertainment, failed to anticipate the shift to on-demand streaming, allowing Netflix to redefine the market. Only after losing significant ground, they introduce Showmax, playing catch-up instead of leading. In this scenario, as I often say, “a blind led another blind.”
Having a strategy expert on the board will redefine the future of board composition. It will not cost us anything to acknowledge that Strategy is not a by-product of other disciplines; it is a specialised field, just like finance or law, and it deserves a dedicated seat at the boardroom table.
The assumption that strategic thinking can be absorbed passively has proven disastrous, as seen in the downfall of multinational companies like Nokia and Kodak which failed to anticipate industry shifts.
Boards composition must evolve beyond compliance and included strategic foresight. A governance structure without a strong strategic foundation is like a ship without a compass; it may stay afloat but lacks direction and a clear understanding of what lies ahead. Take it from here, business that embrace strategic foresight at the highest level will not only endure market changes but will lead the future of their industries.
The Air Namibia’s failure was not simply due to financial mismanagement but also the inability to foresee how modern airlines reduce maintenance and landing costs by avoiding overnight stays.
Similarly, DStv’s response to Netflix was reactionary rather than visionary. Could MultiChoice have led the streaming revolution in Africa instead of following it? Absolutely. But without strategic governance, they could not anticipate where the industry was heading. Again, “Omupofi okukwete mukwao konondje”A blind has led another.
It is time for shareholders and stakeholders to question whether corporate boards have the right mix of skills to support organisations in an increasingly dynamic business landscape.
According to PwC’s recent survey on board effectiveness, only 28% of executives believe their boards possess the right combination of skills and experience to navigate the future. This is a wake-up call to rethink board composition and place strategy at the center of governance.
As a Chartered Corporate Governance Practitioner, I had the opportunity to comment on the Draft King V of the South African Institute of Chartered Directors; a governance framework that inspired NamCode. My approach has always been to advocate for a principle on strategy and to reassess board composition.
Given that NamCode was based on King III principles, which is now outdated, one must question why Namibia continues to rely on an obsolete framework. However, that is a discussion for another day.
The most pressing issue is ensuring that boards composition evolve and decolonised to include strategy as a much-needed skills and not as an implicit skill acquired through other disciplines.
*Onesmus Keudaneko Joseph is Business Strategy Practitoner with a strong focus on strategic foresight and futures literacy. He is currently the Manager for Intellectual Property Enforcement and Frameworks at BIPA. He can be reached on josephonesmus@gmail.com He writes in his personal capacity.
