I spent most of the last week in November doing Continuing Professional Development training online with the Chartered Association of Certified Accountants (ACCA) covering a wide range of topics related to business, accounting and finance.
Not only did the presenters cover several topic areas but they came from all over the globe and shared varying hands on experiences on their participation in past implementation and future planning of business strategy.
Several of the topics covered brought my attention to the manner in which our Caribbean leaders have chosen to deal with leadership appointments in their own countries and in various institutions falling under their control.
Some of these include, the selection of a nominee to be Secretary-General of the Commonwealth, the appointment of a Chairman of the West Indies Cricket Board, the appointment of a Secretary-General to the Organisation of the Eastern Caribbean States (OECS) Secretariat and the latest one the appointment of a Governor to the Eastern Caribbean Central Bank (ECCB).
During the training webinars two matters came into my mind:
1. Succession Planning
2. Fitness for the Job
Succession planning is required for a smooth transition between the old and the new. A good succession plan would create minimum disruptions during the change-over period. The plan is also a part of the organisation’s risk reduction strategy which includes Emergency Management Planning and Recovery.
The ECCB stands out among all the other examples since the margin of error in appointing the successor is almost zero given the mandate and objectives of the organisation. The transition plan should have been in place at least two years before the date of implementation with the successor clearly identified.
The Bank has a mandate to control monetary policy in the region.
Monetary policy refers to the actions undertaken by the Central Bank to influence the availability of money and credit to help promote national economic objectives of growth, employment and stable prices.
Under the terms of the Eastern Caribbean Central Bank Agreement Act 1983, the Monetary Council has responsibility to provide directives and guidelines on matters of monetary and credit policy to the Bank (Article 7.2).
The Monetary Council, which is comprised of one minister from each of the eight participating governments, meets three times a year to receive the Governor’s report on monetary and credit conditions and to give directives and guidelines on policy.
The framework for the conduct of monetary policy is set out in Section 4 of the Agreement, which states that the core purposes of the Bank are to: regulate the availability of money and credit; promote and maintain monetary stability; promote credit and exchange conditions and a sound financial structure conducive to the balanced growth and development of the economies of the territories of the Participating Governments; and Actively promote through means consistent with its other objectives the economic development of the territories of the Participating Governments.
The mandate to promote and maintain monetary stability is interpreted to mean that the Bank must safeguard the value of the currency, in terms of what it will purchase at home and in exchange for other currencies.
The Bank should have had in place a realistic timetable with measurable milestone for the appointment of a successor to the Governor.
The succession period should have been clearly documented and circulated among management so that there would be no doubt when time arises for handover.
The action plan should list all relevant matters for consideration during the period separated into phases. The expected start and the end of each phase should be clearly stated.
The Monetary Council should have employed independent expert assistance with background in law, accounting and change management to develop, implement and supervise the plan. It is not possible to rely on the outgoing executive to do so.
In the event that the plan is left in the hands of the outgoing executive serious questions of integrity and lack of independence can arise. The plan may be open to manipulation and favouritism.
The plan should include the mentorship and training of the successor and an alternative in the event that unforeseen circumstances arise.
The training should be targeted to points of weakness in the successor’s arsenal and also provide for continuing professional development. It may also be necessary to firmly school the successor and the alternate in the management of change.
Legal and procedural matter form a significant part of the changeover plan. Given the complexity and the high level of security embedded in the operation, several changes would need to be registered, signatures changed, security codes and passwords updated, computerised programs adjusted and physical access restricted.
In the period immediately following the handover skill retention may be an issue. It is important to ensure that proper procedural documentation is available and responsibilities are clearly outlined for before and after changeover. Internal procedures for monitoring progress would need to be policed vigilantly.
Fitness for the job is much more to do with the successor’s personal disposition and individual qualities. Some of these qualities are acquired with time while others are implanted in DNA. One of the examples came from motor racing where the presenter pointed out that was not every day one would find a Lewis Hamilton.
Even where it were possible to find a young man with the ability control a $100 Million car at speed in excess of 200 miles per hour around a track consistently, that young man would also need to possess several other qualities in order to be the face on Mercedes-Benz in motor racing.
This would also be closely related to organisational fit. The changeover would naturally be met with resistance. This resistance can range from normal resistance to change to resentment by existing staff at the departure of the incumbent. Solutions to this resistance can range from redeployment within the organisation to outright dismissal.
In the current circumstances it would appear that none of the candidates in the final three selected are current employees of the ECCB or any other Central Bank.
Tremendous care would be required in hoisting an outside entity on the backs of the current employees with the requisite change over period. Probably the greatest mystery is why is the Government of Grenada is so resolute on farming out its Home Grown Economic guru in the middle of its IMF program?