THE BOARD OF FRIENDS: When Public Sector Boards In Nigeria Are Designed As Clubs, Not As Boards (Board That Works – Part IV) By Dr Bolaji Olagunju

Over more than two decades of advising organisations on performance and strategy, I have spent a great deal of time thinking about what makes some institutions perform and others stagnate. The single variable I keep returning to, the one that does more work than any other, is how the leadership at the top is composed and how it operates.

In the private sector, where I have done most of this work, the lesson is one I have come to hold strongly. In the public sector, where I have advised leaders and where I have studied the patterns from outside, the lesson is, if anything, sharper. And it is this lesson I want to share plainly in this column, because I believe naming it is the first step to changing it.

‘Most public sector boards in Nigeria are not boards. They are clubs.’

I do not say this casually, and I do not say it to be provocative. I say it because the distinction matters, and because mistaking one for the other is one of the most consequential errors in our public sector.

A club is a body of people who have been brought together because they belong together. A board is a body of people who have been brought together because, between them, they can govern an institution. These are different things. They require different compositions. They produce different results.

‘The most dangerous board in our public sector is not the hostile board. It is not the divided board. It is the friendly board.’

It is the board where everyone gets along, no one disagrees publicly, the Chair is universally respected, the Chief Executive enjoys cordial relations with every member, and the meetings end on time with smiles all round. This is the board most likely to preside over an institution’s slow drift into irrelevance, and to be surprised when the country eventually notices.

Today I want to say why this is so, and to offer a frame for what we should be aiming at instead.

How a board becomes a club

The Boards in our public sector become clubs by a process so familiar that we barely notice it. Let me describe it. A vacancy arises. An appointment process is initiated. The appointing authority, whether a Minister, a Governor, a Permanent Secretary or a regulator, consults. The consultation, in practice, draws on the relationships and networks of the people doing the consulting. Names are floated. Some are added because of their party loyalty. Some are added because of zonal balance. Some are added because they are owed something. Some are added because they themselves have made the case for their inclusion through trusted intermediaries. Some are added because the appointing authority knows them personally and trusts them.

By the time the list is finalised, the people on it have one thing in common. They have been chosen by, or with the consent of, the same group of people. They share a social network. They share a political affiliation, or at least a political accommodation. They share a sense of mutual obligation. They will, when they meet for the first time, recognise each other.

This is how a club is composed. It is also how most public sector boards in Nigeria are composed today.

The competencies required to govern the institution have not been the primary criterion. The independence of judgement required to challenge management has not been tested. The diversity of perspective required to anticipate what the institution may face over the next five years has not been engineered. These have, at best, been residual considerations after the political and relational arithmetic has been completed.

I want to be careful here. I am not saying that the people who emerge from this process are bad people. Many of them are excellent. Many of them have served their country with distinction. The country has been fortunate, over the years, that political appointment has sometimes produced governance grade directors by accident. My argument is not about the individuals. My argument is about the design of the selection process, which is not engineered to produce a board capable of governing. It is engineered to produce a list capable of being announced.

A list that can be announced and a board that can govern are not the same thing. The country has confused them, repeatedly, for decades. The board has become a club, and clubs cannot govern.

Why clubs cannot govern

A club can do many things. It can convene. It can deliberate amicably. It can endorse the decisions of those who lead it. It can preserve its own cohesion. It can manage its internal relationships skilfully. These are all genuine capabilities. They are not, however, the capabilities required to govern a public institution.

Governance requires capabilities that a club, by its nature, struggles to produce.

Governance requires challenge. A board must be able to push back against management, sometimes firmly, and against the conventional wisdom inside the institution. A club cannot do this without rupturing its own social fabric, and so it tends not to do it at all.

Governance requires independence. Each director must be able to form a view independently of the others, and to express that view even when it is unwelcome. A club, by its nature, produces convergence. Members reach for the consensus position because the consensus is what holds the club together.