Are boards made of dead wood?
Glenn Tucker, GUEST COLUMNIST
I was still a child when I discovered that the word 'board' had more than one meaning. My mother was a principal, and the chairman of the school board was a highly regarded Baptist minister. A general election came and swept a new party to power. Shortly afterwards, the minister was replaced as chairman by a charming, colourful party loyalist. He was ecstatic.
Determined to make his presence felt, he would sometimes visit the school, unannounced, and insist on addressing a general assembly of everyone connected with the school. He even found it necessary to sign his name at the back of the teachers' salary cheques, something my mother blamed herself for as it was she who taught him to write his name a few years earlier in a top-secret, crash course conducted in our garage.
The experience started me thinking: 'What is the function of a board?' This question followed me all the way into adulthood when I had reason to ask myself that question over and over. That is because of what I have been observing.
It seems that many of the seats on boards are reserved for party faithful and friends. These persons see the appointment as some sort of gift, not as a responsibility. Their gratitude is to the giver. So they perceive their role as one in which they have a duty to advance the interest of the giver/party. For them, it is not company or country that is important, it is their benefactor, the party. I am satisfied that many of them know no better.
There is another small group of Jamaicans who are well educated and have considerable experience. Each one is put, literally, on dozens of boards. When this is added to their regular jobs, they are rendered totally ineffective.
The latest board controversy has to do with the National Housing Trust and its decision to buy the 9.1-acre Outameni property in some remote, rural location. According to Opposition Spokesman Audley Shaw, the Outameni 'experience' will cost NHT contributors and taxpayers $280 million. There are enough arguments for and against the sale. I will not participate in that discussion, as anyone who does not understand what has happened is badly in need of glasses.
I have a general board concern and a specific board concern. First, corporate stakeholders, employees, communities and public officials expect companies to manage, mitigate or prevent adverse social and environmental impacts that may be associated with a company's operations. Is there a programme designed to help board members understand their role and function as board members?
challenges in leadership
Media scrutiny, regulatory changes, pressure from investors are just some of the challenges facing an organisation's leadership. There are corporate social responsibility programmes that help companies ensure that they are responsive to these concerns. Are they being used?
A 2010 report by Calvert Asset Management and The Corporate Library, titled Board oversight of environmental and social issues: an analysis of current North American practice, analysed committee charters at S&P 100 firms. The report found that only 65 per cent of S&P 100 companies have board committees with some level of responsibility for oversight and corporate responsibility concerns.
Of those 65 boards, only 27 per cent (18 of 65) monitor and oversee risk-management plans and review the effectiveness of corporate issue identification and management processes, and only eight per cent (five of 65) review and make recommendations on the social and environmental impacts of major operational decisions.
I have been paying. Let me rephrase that. Deductions have been taken from my earnings for the Housing Trust since its inception. This despite the fact that I was reasonably sure I would not need that service. There are others from whom deductions are taken, and based on the Trust's policies, they have absolutely no chance of benefiting.
So as far as the services go, some don't need it and many others can't get it. This, along with the slow pace of providing solutions, has resulted in the Trust bursting at the seams with cash. This should be the first sign that something is wrong. Money is available, while contributors need homes and can't get homes. Has the board ever tried to find out why and attempt to find solutions? Not that I know.
Instead, this money - the contributions of the workers - has started to find its way all over the place. The most recent is an $11-billion removal to government coffers each year for the next four years. Were the owners of this money consulted? Is this fair? Is it legal? If so, who made it legal? Are board members familiar with the baseline legal rules that they must follow to steer clear of legal troubles?
A large number of contributors are living in unsatisfactory conditions. Others who have been successful in getting a unit had to go through some major financial gymnastics to succeed. They are unlikely to keep up with payments.
There were five trade unionists on the board. Is there a demographer there? Is the board in a position to say how many families with one full-time worker earning the minimum wage exist in the country? And what are the chances of such persons ever benefiting from the Trust?
The last NHT unit I visited left me with the initial impression that I was in a walk-in closet. If I wanted to change my mind, I would have to go outside and come back. I was not surprised. They are still using the traditional, expensive techno-logy to build houses. So they have to reduce size.
One interesting feature of all this is that board members are nearly always 'abroad'. I have no problem with this if they are travelling to find solutions for cheaper housing solutions. After all, the prime minister of Singapore visited us in the 1960s when his country was just a corrupt backwater. He said he was looking for solutions. Today, Singapore has the highest trade-to-GDP in the world and ranks 11th in foreign-exchange reserves held. But where is the evidence that this is what is happening?
searching for solutions
Low-income housing needs new ideas. This should not be difficult. It is being done with varying degrees of success in a host of developing countries in the world. What is the NHT able to show in its 40 years of existence that would convince us that it is searching for solutions? Why is the NHT unable to provide more solutions annually?
It's not just shelter. In the US, studies have shown that poor housing contributes to children suffering from asthma, viral infections. and other health problems. Poor housing encourages criminal activities and is often physically dangerous to occupy.
A community can never build social capital unless its residents have access to basic shelter and feel confident that their investment in housing will be protected by their leaders. Acquiring and maintaining housing fosters a commitment to community.
Housing is a key input in economic, social and civic development. Construction is a large employer of labour. Despite the clear linkages between housing and socio-economic goals, opportunities to achieve these goals through housing-related initiatives are being missed by the NHT.
Whenever an agency is asked to explain its reason for failing to perform, the universal cry is 'lack of funds'. Can the NHT explain what are the reasons behind the lack of decent affordable housing for the poor? What are its plans to meet the needs of the urban poor? It's been forty years. It is awash with funds. If there is so much money that it is forced to look outside housing to spend it, how about a few sanitation plants in areas where residents are wading through raw sewage?
It is of paramount importance that the NHT board understand its role and its obligation to contributors. Members must understand that their first responsibility is to contributors and not to who put them there - regardless of how grateful they are.
It is imperative that the NHT invest in corporate board governance seminars and director conferences. Regardless of their other skills and competences, there is evidence that it is necessary to build the capacities of NHT board members who need to quickly enhance their understanding of low-income housing issues.