There is emphasis on the individual actors in a governing body having a duty to the corporate to exercise independence of judgement as they discharge their functions.

In the Zambian Companies Act No. 10 of 2017, a Director’s exercise of independent judgment is described as one of the fiduciary duties he or she has towards the company.

However, as I share my thoughts, I will take an approach that extends this principle to the rest of the governance structures in an organization.

I think that it is important for us to interrogate this principle beyond the fact of exercise of independent judgment.

The success of the organization is top on its agenda and therefore, all its activities are expected to be aligned towards that key goal. It follows that decision making at all levels should reflect that.

Imagine a decision to stop production in a factory for the day before meeting the target because a few people decided to have a birthday party for their work mate and thought it best to use the factory as their venue? Customer rage, potential law suits, low revenues, reputational damage to the corporate are among possible effects.

Clearly, from the example above, the operatives in the factory did not make a decision that would promote the success of the corporate.

The question is what regulation and processes can a corporate put in place to mitigate or even better, avoid the risks associated with decisions such as that described above?

In exercising independent judgment, one key assumption is that information on the issue at hand is available and understood. Then with a combination of your particular skills and experience, you are able to arrive at what your thoughts are on the matter and whether in your view, a decision should be made in a certain manner. But that is not it…yours is a contribution to the process of arriving at a collective decision of the governing body.

Depending on the decision making process within a governing body, your contribution may add to the majority or minority view, whatever the case may be.

Interestingly, however, I have come across decision making processes at Board of Directors level, which stipulate that if the vote for a Director representing the interests of a particular share owner is not obtained, a decision on certain matters would not be valid. This is common particularly from the perspective of the extent of stake that a share owner has in a corporate. It may be that the effect that such decisions would be that the risks would fall squarely or adversely affect that share owner. Therefore it seems only logical that they weigh in on such decisions.

The connectors to exercise of independent judgment are the decision making process and decision itself.

I think that the connections alluded to above complete the cycle of decision making.