Again, responsibility and accountability for board members

I was surprised to read the David Tang’s reply to a question on the British Airways’ debacle of complete shutdown of its computers a couple of weeks ago (FT 10th June 2017). David Tang is my favourite FT Weekend columnists and it is the first column that I go to every Saturday for these last ten years.

I am taken aback as David wrote that he has resigned from all board appointments because he felt that they were too onerous for him as a duty and responsibility. Besides my thinking that he was a sort of braver man, I disagreed with his description of board directors as “comfortable creatures, with their smart attire and suitcases scaling the stairs of corporate glamour and in receipt of alluring bonuses, but who are never criticised when their collective decision-making turns out to be rotten”. Very Mary Poppins and Mr Banks! This is why he suggested that all frustrated British Airways’ clients should start chasing the board directors directly with their complaints. I beg to differ on a few points.

The idea of comfortable directors sitting on boards is very much passé. Regulation and compliance today makes it impossible for board directors to have the enjoyable time that David seems to be suggesting. The pressures are great and I would say that business is suffering. There is too much compliance to regulations in boards and check-lists and bureaucracy and multiple committees and not enough time for debate and decisions on strategy, innovation and development. Directors are feeling the brunt of (most of the time) disproportionate regulation. Very soon only the very brave will be willing to join boards.

Secondly, I still think that there is an element of unfairness of burdening directors with all the responsibility and consequently accountability, without them having proper authority. The three – authority, responsibility and accountability – go together and make up the trinity of governance and management, and you cannot have one without the other. Authority is synonymous to power or influence, but you cannot have authority without full access to information. All is based on the trust and confidence that the board of directors has in the C- suite, but then the C-suite has also its own limitations on oversight and control mechanisms. Where is the problem then? It is so easy to point fingers at the board of directors who would have spent hours of otherwise better used time on reading and approving policies and procedures, following compliance to new regulations, when the problem could be a human error three to four layers down the company’s organisation pyramid. Let us not generalise for goodness’ sake, but let us also be brave to confront such unfortunate mishaps.

About the author(s)

Joseph F.X. Zahra is a Malta based economist with over thirty five years of corporate leadership and business consultancy experience.