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Corporate Leaders Call for Collaboration for Stability, Growth :: Uganda Radionetwork

Corporate Leaders Call for Collaboration for Stability, Growth

Ronald Mutumba, the Vice President of the ICPAU Council, said where there is no collaboration and support for each other, there is space for stagnation in growth and development and even collapse
Karamagi, Nabbanja and Robert Kabushenga, the panel moderator
Corporate leaders have called on shareholders of entities to emphasize technical skills when appointing members of the board, to build a strong foundation for stability and growth.

This, they say, also ensures close collaboration between the Board, the Chief Executive (CEO), and the Chief Finance Officer (CFO), which is vital in ensuring good governance.

This was at the 2nd C-Suit Forum, an annual corporate governance forum by the Institute of Certified Public Accountancy (ICPAU), under the theme: The collaborative role of the Board, the CEO, and the CFO in fostering organizational performance.

Ronald Mutumba, the Vice President of the ICPAU Council, said where there is no collaboration and support for each other, there is space for stagnation in growth and development and even collapse.

The accountants also condemned the appointment of persons to the board as a way of rewarding someone, instead of considering the knowledge and skills one has.

The skill in a particular field is also vital for the members of the board to make an informed decision and even puts them in a good position to give technical advice to the executives.

Giving examples of global corporations that have collapsed due to mismanagement, Proscivia Nabbanja, the CEO of the Uganda National Oil Company said where there is close Cooperation between the board, the CEO, and the CFO, there is a lower chance of failure.

She said most of the major corporate scandals like the Lehman Brothers, Enron, Volkswagen emissions, and the Pentagon procurements are all a result of either a lack of management competency or an absence of close cooperation and collaboration between the three functions.

"So you ask yourself where was the CFO where was the CEO where was the board and what role did they have to play in the failing of Lehman Brothers? I think Adam Taylor (the CFO) was not qualified for the job," she said. 

Taylor has since explained that the company collapsed before he was hired.

She also called for more efforts to ensure that all major organizations have CFOs that are qualified and licensed accountants.

According to her, therefore, there is a need for open communication, a collaborative mindset, and aligned strategies between the three functions.

The discussion was based on the realization that the rapid developments in the accountancy profession and technology have had an immense impact on both the public and private sector entities. 

This means, therefore, the board, CEO, and CFO must be "strategically aligned to drive organizational growth and deliver sustainable entities, and fully conscious of the changing customer expectations, new laws, regulations and policies, technological developments and disruptive business models." 

Joshua Karamagi, the CEO of Uganda Electricity Transmission Company Ltd (UETCL) called on the CEOs and Boards to give enough space to CFOs to express their skills and abilities because, he said, many of them are suffocated by their seniors.

Karamagi, a Certified Financial Analyst said the CFO is supposed to be third in the governance hierarchy but that many are very distant from the CEO and the board.

"It has to be intentional that you want to grow to be the next CEO. If that is not there and you are not close to the CEO then the collaboration is not going to work. CFOs sometimes are not empowered. They do not sit even on the boards of directors so they just feel comfortable where they are," he said.

Emphasizing the need for skilled board members, Karamagi said these have the power to make decisions that can collapse an entity.

UETCL is a private limited company fully owned by the government, with the Minister of Finance, Planning, and Economic Development and the Minister of Energy and Mineral Development being the two equal shareholders.

Karamagi also warned against merging his company with the sister entities, UEGCL and UEDCL that handle generation and distribution respectively, saying that the move is one example of not understanding the sector.

The separation was to attract private capital and this has led to investment flows into the sector, leading to expansion of infrastructure networks and electricity access.

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