ICSAN Board Dynamics common mistakes
ICSAN Board Dynamics · Understand the traps and how to avoid them.
Treating the duty of care and skill as a single 'be diligent' answer, and describing only the subjective test (what the particular director actually knew and did) while ignoring that Nigerian law also applies an objective standard of the skill a reasonable director in that office would exercise.
Candidates memorise 'act in good faith and in the best interest of the company' as a slogan and never separate the objective limb from the subjective limb, so they cannot allocate marks when a scenario hinges on a director who was honest but incompetent.
What to do instead
Build a two-limb answer template: subjective (the director's actual knowledge, experience and the functions actually performed) plus objective (the degree of skill of a reasonably diligent person with the same responsibilities). Apply both limbs to the named director in the scenario and state which limb fails, then note the business judgment rule does not rescue a director who never informed himself.
Answering an independence question by counting non-executive directors or checking only that a director holds no executive office, without testing the relationship-based disqualifiers such as former employment, family ties, cross-directorships, material supplier or adviser relationships and shareholding thresholds.
Independence is taught as a label ('NED = independent') rather than as a facts-and-circumstances test, and candidates rush to the headcount because it feels like a complete answer.
What to do instead
State the test as 'no relationship that could materially interfere with objective judgment', then run a checklist against each named director: employment history, kinship, cross-directorship, professional fees, controlling shareholder links, tenure. Conclude per director, not per board, and flag that a long-serving director may be reclassified as non-independent on tenure grounds.
Describing a board committee as merely 'advising' or 'recommending to the board' without stating which powers have been formally delegated, what the committee's written terms of reference must cover, quorum and reporting lines, and which matters cannot be delegated (reserved to the full board).
Candidates conflate advisory committees with decision-making committees and never learn that delegation requires an explicit authority instrument and that certain reserved matters stay with the board.
What to do instead
For every committee answer, specify: (a) delegated authority and its limits, (b) written terms of reference covering composition, quorum, frequency, minutes and reporting, (c) reserved matters retained by the board (strategy, major acquisitions, capital, risk appetite, appointments at the top, financial reporting approval), and (d) that delegation does not absolve the board of ultimate accountability.
Writing a meeting-answer that covers notice and quorum but omits the information architecture: what the board pack must contain, how far in advance it is circulated, the role of the company secretary, how conflicts are declared and minuted, and how decisions and dissents are recorded.
Candidates treat meetings as procedural box-ticking and underestimate the marks attached to information quality and minute-taking as governance evidence.
What to do instead
Structure the answer as pre-meeting (agenda ownership, pack quality and timeliness, briefing of directors, conflict pre-clearance), in-meeting (quorum, declaration of interest, chairing discipline, dissent recorded) and post-meeting (action log, minutes approved, follow-up). Explicitly state that minutes should record decisions and the reasons, not a transcript, and that a director who dissents should have that dissent minuted.
Conducting a board evaluation as a one-line 'the board should review its performance annually' with no design detail: no distinction between self-assessment, peer review and externally facilitated review, no criteria, no feedback loop into a development plan, and no individual director appraisal.
Evaluation is memorised as a compliance obligation rather than a design problem, so candidates cannot describe how an evaluation actually changes behaviour.
What to do instead
Specify purpose, scope (board, committees, chair, individual directors), method (questionnaire, interviews, observation, external facilitation at intervals), criteria (composition, dynamics, information, strategy oversight, risk, stakeholder engagement), reporting route, and the action plan with owners and review dates. Note that the chair should not lead an evaluation of the chair, and that results should feed the nomination and development cycle.
Explaining group dysfunction only as 'groupthink', without identifying the specific mechanisms - suppression of dissent, illusion of unanimity, self-censorship, stereotyping of outsiders, pressure on the deviant - or the countermeasures such as devil's advocacy, red teams, pre-mortems, independent briefings and a chair who invites challenge.
Groupthink is a single familiar label, so candidates stop at naming it and cannot earn the analysis and remedy marks that scenarios about a dominant chair or a compliant board are testing.
What to do instead
Name the symptoms present in the scenario, then prescribe matched countermeasures: assign a challenger role, solicit written views before discussion to avoid anchoring, deliberately seek outside evidence, split the decision into stages, require a 'what would make this fail' step, and ensure the chair speaks last. Link each remedy to the symptom it neutralises.
Treating stakeholder engagement as public relations and listing 'engage stakeholders' without mapping who the material stakeholders are, their salience (power, legitimacy, urgency), the legal or regulatory duties owed to each, and how the board receives and acts on stakeholder feedback.
Candidates default to a communications answer because engagement feels softer than legal duty, and they do not connect engagement to the directors' duty to have regard to a wider set of interests and to long-term sustainability.
What to do instead
Map stakeholders and their claims, identify the duty or relationship attaching to each (employees, regulators, minority shareholders, creditors, host communities), describe the mechanism (whistleblowing channels, workforce engagement arrangements, investor dialogue, community forums), and close the loop by showing how insight reaches the board agenda and influences decisions. Distinguish engagement from disclosure.
Presenting risk oversight as the board 'reviewing the risk register', with no statement of risk appetite, no three-lines-of-defence or assurance mapping, and no clarity on what the board owns versus what management owns.
Candidates blur the board's oversight role with management's operational role, so the answer describes a control activity rather than a governance responsibility.
What to do instead
State the board's ownership of risk appetite and tolerance, the committee route for detailed oversight (audit and risk committee), the assurance sources (internal audit, external audit, compliance, independent reviews) and the escalation triggers. Make the division of labour explicit: management identifies and manages, the board sets appetite and challenges, internal audit provides independent assurance.
Answering conflict-of-interest and ethics questions with 'the director should disclose and abstain' but omitting the mechanics: when disclosure must occur, to whom, whether it goes in the minutes, how the conflicted director is excluded from discussion and voting, how the register of interests is maintained, and how the chair handles a conflicted chair.
The headline rule is well known, but candidates have not rehearsed the procedural detail, which is where most of the marks sit in scenario questions.
What to do instead
Write the full sequence: declare at the earliest opportunity (before discussion), record in the register and the minutes, withdraw from discussion and voting, ensure the remaining directors form a quorum, and where the chair is conflicted, hand over to an independent director. Add the escalation route if the conflict is not properly handled and the role of the company secretary in maintaining the register.
Describing board-management relations as a hierarchy ('the board instructs management') rather than a boundary: no discussion of the chair/CEO relationship, the separation of the chair and chief executive roles, how the board challenges without micromanaging, and how a strong CEO can capture or marginalise the board.
Candidates lack a model of the board as overseer and partner, so they either overstate control or fail to spot CEO dominance in the scenario.
What to do instead
Frame the relationship around role clarity and information asymmetry: the board sets strategy and holds management to account, management executes and informs. Cover the chair/CEO division of labour, regular executive sessions without management, independent access to the company secretary and internal audit, succession planning for the CEO, and warning signs of capture (thin packs, late papers, unchallenged narratives, long CEO tenure with a passive board).