Romania Financially Educated
The role of the Board team in the management of an organization – Mircea Varga – Chairman of the Board at TEILOR Holding, Board Member at Safetech Innovations & Perla Harghitei, by Dr. Kristine Bago
Dr. Kristine Bago: “The 2008 financial crisis opened the world’s eyes to the lack of control systems and the almost negligent attitude of some financial institutions towards risk management.
Subsequent investigations flagged “attitudes toward risk” and “cultures that encouraged and rewarded quantity rather than quality” without any concern for long-term consequences.
The failure of these organizations underscores the importance of good governance by the Board team in such situations.
The Australian Institute of Company Directors says: “The Board team sits at the top of the organization’s hierarchy, has ultimate authority and responsibility for the organization, is part of the organization’s leadership along with executive management and must therefore have a role in shaping and monitoring the company’ culture.”
Mr. Varga, how important is the relationship between the Board team and the organizational culture?
Mircea Varga – Chairman of the Board at TEILOR Holding, Board Member at Safetech Innovations & Perla Harghitei: “By bringing individuals with a well-known background into the company, you provide stakeholders with a certain level of confidence.
Especially when you are listed on the Stock Exchange, investors look very carefully at those who coordinate and run that organization, because at the end of the day, they put their money in the hands of these people.
Therefore, it is crucial for these individuals to possess an impeccable reputation from all perspectives. They should be people who are clearly capable of making the best decisions to ensure optimal utilization of those funds, which brings a major advantage for any organization.
Having someone on board who has experience in organizational transformation, stock market listings or transactions, simplifies matters greatly. They precisely understand what needs to be done, eliminating the need for trial and error. You are aware of how much you should allocate for consultations related to such activities and so on. This adds a significant amount of value, and here we address matters such as costs and furthermore.
The cost is not as high as one might think.
When you appoint an experienced individual to the Board of Directors, you are not compensating them as if they were full-time employees. As they are not employees, they need to allocate a specific number of hours. Consequently, the expense is not substantial compared to the benefits brought by a Board Member.
Certainly, those who dare to take this step, not just due to legal requirements, but because they recognize its utility— even if not fully comprehended— will quickly realize the benefits of this cost.
I would like to reiterate that I consider it an investment.
Before talking about the contribution of a Board Member to an organizational culture, it’s worth taking a step back and considering the following: those interested in embracing these kind of positions in organizations, such as independent Board Members, should carefully select their organizations.
This is where you can truly see the connection to the organizational culture.
It’s wise when we want to take this kind of step and engage in discussions with companies offering such positions, to throughly understand the respective organization and the entrepreneur behind it, as well as the values of that organization.
Ultimately, there needs to be a chemistry, a resonance with those values, for successful collaboration; otherwise, things might not work out.
Often, discussions start at the shareholder level.
A perfect alignment of the shared values is essential because when an entrepreneur decides to take this step, embarking on this venture together is crucial – it’s a partnership, involving the entrepreneur and the shareholders.
This isn’t an easy task, as it involves changing certain aspects related to organizational culture.
But How?
If up until then, the entrepreneur was making all the decisions independently at the general assembly level, within the board of directors, or as the administrator, and also at the executive management level, things change once a Board Member is brought in.
Some of the organization’s reins need to be relinquished into the hands of that individual or the Board of Directors. This isn’t always comfortable for an entrepreneur who, until recently, made all the decisions by himself, sometimes by making micro-management, to whom some individuals are dependent upon – they believe that without micro-management, they lack control and that things won’t work.
However, this view is false, as often when you’re in the middle of the action, with all the pieces on the board, day by day, you may feel like you see everything – but often you don’t.
Furthermore, shareholders should focus more on strategy, rather than executive management – there are experienced individuals who handle this kind of task.“
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Dr. Kristine Bago joined Nine O′Clock at the beginning of August 2023 as a Partner Editor.
Kristine Bago is a well-known financial auditor with extensive industry experience – former Big4 alumna, entrepreneur in the financial services, economic influencer & Romanian TV Show producer.
Kristine Bago possess a wide experience in finance area, both in academic terms – certifications acquired, as well as experience gained in corporate companies, working for a period of 6 years at the major financial consulting companies in the world, as part of the Big4 network: PwC, KPMG and Deloitte Romania.
Kristine Bago holds a Bachelor, Master and Ph.D. degree from West University of Timisoara, being national & international (ACCA) certified in her profession.(financial audit). As a result-driven professional, she used all her expertise & previous professional involvement and build, in 2020, a unique business concept by adding into the Romanian business environment a new service – financial audit advisory, for companies having already an external financial auditor appointed. 17 companies in TOP 20 major companies in Romania become quickly, in the pandemic year, her clients. 1 year later, Kristine Bago establish another milestone – the media coverage. In 2021, she receives the offer to make an Economic Radio Show at GOLD FM and 6 months later, at the beggining of 2022, she was invited to be the permanent guest at an Economic TV Show at Profit News. After another 6 months as a permanent guest, she starts to be the sole producer of the Economic TV Show broadcasted by Profit News.
In 2023 (one year later), she records her own brand and starts her own TV Show, having the most important & representative guests from the financial ecosystem in Romania. During all this time, she used to write professional articles about major financial issues in Romania & worldwide, financial reviews / analysis, contributing in an objective way to the financial education of her audience.
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