• Madani Sahari

Director’s role in enhancing vendors’ competitiveness

We often hear of grievances among top management of the companies that they lack guidance from the board of directors (BOD).

Directors are more concern with correcting or criticizing the contents on papers presented before them in BOD meetings rather than taking the lead on pertinent and strategic issued faced by the company.

The problems are more acute in private-owned companies where the BOD is chaired by majority shareholders or the company founders, while members of the board are made up of minority shareholders who are mostly family members or close friends.

The composition of the BOD is mostly made up of members who have little or no knowledge or experience in company business.

The burden of strategic management lies on top executives of the companies who inevitably have to spend more time on daily operational issues.

The companies do employ managers to manage the operations, but they need the leadership and coordination from chief executive officers to perform efficiently.

In such scenarios, the companies are deprived of having sound strategic planning and management to have a concrete strategy for success in the longer term.

The most important step in strategic planning is to have a clear definition on the distinctive competency level in the company and a clear vision of competition outside the company.

The key challenge is for the BOD and the management to strike a balance role in formulating the company’s business strategies.

Frequent BOD meetings are spent mostly validating the company’s compliance-related issues.

The BOD should dedicate at least two of its meetings a year to focus on strategic planning and development issues.

The management may propose detail business strategic planning and with the right composition of directors in the BOD reviewing the proposal, it will lead to a more well-formed strategy and plan for the company.

Transforming the plan into action is important and the BOD should be able by any means to monitor the progress of formulated strategic plan by the management.

The Malaysia automotive industry has crossed its 30 years threshold period where a new management concept must replace the old ways of managing businesses.

Most ownership of automotive parts and components vendors has been passed to the next generation, who are young and dynamic.

Although much automotive manufacturing knowledge and experience has been gathered over the years, the younger top company executives are in need if support from the wise and well-rounded members of the BOD to drive the company to greater heights.

Enhancing the company efficiency and competitiveness among automotive vendors is now a national agenda but that alone would not suffice if the companies’ long term business strategies are not fully comprehended.

In short, members of the BOD too have a bigger role to play, to ensure that the success of the company is based on a sound business strategic plan.

The positive role of the BOD is to contribute and continuously review the strategic development and positioning of the company while supporting the management in executing the plans.

The management performances are frequently reviewed to ensure all implementation is according to a set plan.

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