Earlier this year I co-founded a company with three people I admire and respect, and took on the role of executive chairman. SiSebenza is a start-up that creates new opportunities for economic growth in Africa by partnering with large, successful and well-funded global businesses entering our local market.
The nature of this business has given me fresh insights into the role of chairman. There’s quite an art to it. One of the joys of being involved in a fresh new company is the extent of involvement of every employee, from the bottom of the company all the way to the top. Roles can sometimes overlap and everyone just gets on with doing what needs to be done.
By contrast, in a more established company roles are much more clearly defined. The buck may stop with the chairman but there’s a fine line between being accountable and treading on the toes of the board. The chairman has to be careful of falling into the trap of thinking he runs the business: he doesn’t. That’s the CEO’s role.
One of the things I enjoy about chairing a company that I co-founded is the extent of my knowledge of the business. The chairman of any company has to have an unchallenged level of knowledge so that he or she can ask the right questions and interpret the answers correctly. When you take on the role in an established business, you have to learn everything about the company and you rely on your board to keep you informed and up to date.
I was part of the design of the company so there was nothing to learn. There is an automatic sense of understanding and a natural engagement with the business and its stakeholders. I find that the level of engagement depends very much on where the company is in the business cycle, and how the chairman gets involved can make or break a business.
It’s easy to think all a chairman does is ensure that controls are in place, risk is effectively managed, and financial reporting is accurate. Yes, effective governance is very high on my list of duties, as are oversight of senior management and heads of control functions, and allocation and delegation of roles and responsibilities. But softer skills are equally important.
Many of the tasks of the chairman require tact and sensitivity. Communication is everything. I must ensure that all board directors are part of important discussions and, especially, of decision-making. I have to be tuned in to the mix of characters on any board I chair if I’m to help the members achieve consensus.
And regardless of what happens in board meetings, I need to ensure that my advice and counsel to the group CEO is independent. No matter the size of the company, the relationship between the chairman and the CEO has to be one of trust. The CEO has to feel comfortable enough with the chairman to be completely transparent with him or her, especially when things are not going well.
Other qualities of a good chairman include having a clear strategic view of the big picture while others get on with the tactical approaches. A broad business background is also important. That said, being involved with a start-up has done a great job of reminding me that every business has a heart, and the closer you are to it, the more effective you can be.
I’ve loved the adventure of creating something new with people I value and hold in high regard. Yes, it can feel daunting at first, but its fun and exciting. New companies have to be agile and seem to fizz with creative energy. The challenges are fresh and every little success is meaningful.
There is one thing that remains the same in every company, no matter its size: good governance. The words ‘corporate’ and ‘governance’ always go together, as if good governance applied only to corporations. On the contrary. If you’re a small company hoping to grow by doing business with large companies, you need to ensure that your governance is every bit as good as theirs.
Bonang Mohale is the Co-founder & Executive Chairman of SiSebenza.
Published on IOL