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I.
Emerging Role & Responsibilities of Company Directors
Modern tenets of good corporate governance enjoin several
specific responsibilities on members of company boards.
Some of these are ordained by law, while many more are
perceived as proper and necessary in the discharge of
the fiduciary responsibilities of the directors.
Role, Responsibility and Accountability
Despite the increasing focus on board accountability and
contribution, there is little doubt on the board’s role
to direct the affairs of the company and its responsibility
to exercise oversight control such that the wealth and
wealth-creating assets of the company are protected. Arguably
the most extensive and far-reaching delineation of board
responsibilities is to be found in the Canadian guidelines
, which identify five specific components of the board's
stewardship responsibilities as follows:
• adoption of a strategic planning process, including
monitoring of performance,
• management of risk
• recruitment, retention, rewarding and replacement of
senior management, the chief executive,
• effective and transparent communication, and
• ensuring integrity of corporate internal control and
management information systems.
To these must be added the responsibility of ensuring
that the business of the organization is carried out within
a laid down value framework that covers business integrity
and ethics, social responsiveness and corporate citizenship.
None of this of course implies that the board itself has
to take hands-on responsibility in preparing strategic
plans or implementing appropriate internal controls and
so on, which are all the function of the chief executive
and his or her operating team. But clearly, it is the
responsibility of the board to see that appropriate systems
and processes are in place that would ensure, facilitate,
encourage, and monitor proper discharge of these responsibilities.
This would of course include appropriate feedback and
review mechanisms to provide reasonable assurance that
laid down systems were in fact being followed and that
any deviant behaviour was flagged for attention and correction.
The Cadbury Report (1992) described the board responsibility
in more succinct phraseology, to include setting the company's
strategic aims, providing the leadership to put them into
effect, supervising the management of the business, and
reporting to shareholders on their stewardship. It is
to the credit of the Cadbury Committee, successive reviewing
committees have virtually retained the basic edifice postulated,
and built upon it to recognize both practical convenience
and changing business dynamics. Most, if not virtually
all of these recommendations are now incorporated in the
combined code applicable to companies listed on the London
Stock Exchange.
Several other countries have followed suit, in this renaissance
of corporate governance standards in the last decade of
the 20th century and flowing into the 21st. In 1999, the
OECD Principles on Corporate Governance were published;
these were revised and reissued in 2004. In the same year,
the Commonwealth Association for Corporate Governance
articulated the role and responsibilities of the board
in greater detail.
Any review, however brief, of international developments
in the area of board and director roles and responsibilities,
would not be complete without reference to the events
and regulatory responses in the United States, in the
closing years of the last millennium and spilling over
to the beginning years of the 21st Century close on the
heels of corporate misdemeanours and disasters in the
country, exemplified by the demise of Enron and the reputed
audit firm, Arthur Anderson, governance requirements were
considerably tightened by the enactment of Sarbanes-Oxley
Act of 2002, by major strengthening of independence criteria
through the New York Stock Exchange listing requirement,
and by the constitution of the watchdog entity, the Public
Company Accounting Oversight Board. All these measures
were aimed at enhancing corporate board, and executive
accountability to shareholders and investors.
In India, the SEBI (Kumar Mangalam Birla) Report on Corporate
Governance (KMB) describes this role as providing leadership
and strategic guidance, objective and independent judgement,
and control over the company in the discharge of its accountability
to the shareholders. Direction, control, and accountability
as the three prongs of board responsibility have been
described in the following manner:
“The board directs the company, by formulating and reviewing
company’s policies, strategies, major plans of action,
risk policy, annual budgets and business plans, setting
performance objectives, monitoring implementation and
corporate performance, and overseeing major capital expenditures,
acquisitions and divestitures, change in financial control
and compliance with applicable laws, taking into account
the interests of stakeholders. It controls the company
and its management by laying down the code of conduct,
overseeing the process of disclosure and communications,
ensuring that appropriate systems for financial control
and reporting and monitoring risk are in place, evaluating
the performance of management, chief executive, executive
directors and providing checks and balances to reduce
potential conflict between the specific interests of management
and the wider interests of the company and shareholders
including misuse of corporate assets and abuse in related
party transactions. It is accountable to the shareholders
for creating, protecting and enhancing wealth and resources
for the company, and reporting to them on the performance
in a timely and transparent manner. However, it is not
involved in day-to-day management of the company, which
is the responsibility of the management.”
The distinction between direction (which is the responsibility
of the board) and management (which is the responsibility
of executive management including the managing director
and other directors in their role as executives) is often
not as clearly perceived as it ought to be. It was the
1994 Canadian report that first drew specific attention
to this important distinction and recommended that "governing
corporate statutes be revised to eliminate any possible
interpretation of the directors' responsibility as being
to manage the business day-to-day and to describe the
responsibility as being to supervise the management of
the business". While this position is in fact recognized
in Indian law, though in a contextually different situation,
where the Managing Director (meaning the Chief Executive)
is defined as being entrusted with "substantial powers
of management" and the exercise of such powers being
"subject to the superintendence, control and direction
of its Board of Directors" [emphasis supplied], there
are other confusing and misleading references such as
for example, directors' remuneration being broadly covered
under managerial remuneration, and several maters dealing
with the Board and the directors being grouped under a
broad chapter heading titled Management and Administration.
There is clearly a need to bring this important distinction
into stronger focus and possibly group provisions relating
to governance, board, directors etc in a separate chapter
preceding those dealing with management and operations.
The KMB Report (2000) has done well to highlight these
distinctions by defining the board's responsibilities
as relating to direction, control and accountability,
and those of the executive or management as relating to
maximization of shareholder value without detriment to
other stakeholder interests. A detailed listing of management
functions in the Report also helps to further clarify
the differing roles of the board and directors on the
one hand, and the executive management on the other.
While accountability to the shareholders and creation
of wealth for them are seen as central to the corporate
governance debate, there is no denying the board's accountability
to the company's stakeholders as well. Prominent among
the advocacy of stakeholder rights is the 1995 work of
Margaret Blair in which she rejects the traditional residual
claimants theory supporting shareholder primacy, and postulates
the rights of employees in particular where their firm-specific
investments may be more important in the wealth creation
process than the financial resources provided by the shareholders.
Many other economists have from time to time espoused
the cause of other stakeholders like customers, community,
vendors, etc. The basic objective of good governance in
this view, would be to legally and ethically optimize
a sustainable return on the investment and ensuring its
fair and equitable distribution among all legitimate stakeholders.
Modern governance codes tend to tread a cautious middle
path. While shareholder wealth creation is still the focus,
stakeholder interests also need to be protected. The OECD
document on corporate governance authored by Mr. Ira Millstein
and five others including Sir Adrian Cadbury, observes
that while acknowledging the primary objective of corporations
in market economies as generating economic profit so as
to enhance shareholder value in the long term, corporate
governance must simultaneously fulfill broader economic,
social and other national objectives. The SEBI Kumar Mangalam
Birla Report (2000) postulates that the primary objective
of corporate governance is the enhancement of shareholder
value, keeping in view the interests of other stakeholders.
The board's role then is to steer a clear course in driving
shareholder wealth creation and protection. In pursuing
this goal, relationships with stakeholders need to be
managed such that their interests are also taken care
of. This is indeed a complex scenario, particularly when
such competing interests are unlikely to be goal-congruent,
with boards often being seen as pursuing a policy of hunting
with the hounds and running with the hares. In cases where
shareholders' interests are threatened, boards will have
to move in to protect them to the extent they can.
II. Professional & Academic Guidance
Given the brief overview of the emerging requirements
and expectations of corporate directors, it is important
to highlight the imperatives of equipping both the incumbent
and prospective directors with an adequate appreciation
of the principles and practices in this field. As can
be readily appreciated, under the overarching umbrella
label of corporate governance are included several dimensions
of responsibilities such as the legal dimension, the financial
dimension, the behavioural and human resources dimension,
the control dimension, the communications dimension, the
value dimension, and so on. Board members arrive at their
destination through a variety of routes and expertise:
the executive and functional whole time directors including
the managing directors and executive chairmen come up
through their functional and professional specializations
and leadership skills; non-executive directors (including
the independent directors) are inducted on to company
boards for their wisdom, expertise and experience, and
often also for their successful track record of performance.
In either case, directors could be handpicked by the controlling
groups of owners or managers, or nominated by other stakeholders
such as financial institutions, the government, employee
associations, and so on. While their entry to the boardroom
may be fully justified on the basis of their personal
excellence in their chosen fields of expertise, most of
them are in varying degrees quite unprepared for their
new responsibilities. Often, board appointments are perceived
as just rewards of good work done, and it is not uncommon
to view such appointments as promotions.
A totally different and overwhelming dimension of responsibility,
rarely fully understood or appreciated, awaits the newly
appointed director. Elevation to the board, an expression
often used, is perhaps a most appropriate term for this
event, because it does involve a paradigm shift in the
individual’s attitude and approach to issues that come
for discussion and decision.
The need therefore for some academic and professional
inputs to cope with these new realities cannot be gainsaid.
It is more in the nature of a basic change in orientation
that is called for: not so much in terms of further business
or functional inputs (important as they are) but more
in terms of a different orientation necessary for evaluating
board decisions from the perspective of the directors’
fiduciary and stewardship obligations to numerous clientele
groups both inside and outside the domain of the company’s
business operations. This is the reason why the directors’
programme on corporate governance periodically offered
at the Indian Institute of Management Bangalore Centre
for Corporate Governance and Citizenship is titled an
Orientation Programme rather than simply as a training
programme. Because of its scope extending beyond just
executive competencies, this Orientation Programme is
not part of the Institute’s celebrated Executive Education
Programmes Division, but choreographed by the specialist
Centre for Corporate Governance and Citizenship.
Another important dimension of such programmes is the
nature of information flows: it is not just limited to
lectures by academics alone but a range of inputs from
other practitioners in the field are dovetailed into the
programme content and delivery. Equally, participants
learn from each other as well, perhaps more so than only
from the speakers. This is enabled by rigorous screening
of prospective participants for their record of board
interaction and exposure, so that the eventual group is
crafted as a cohesive and compatible set of participants,
who literally have been there, have done it and so interact
from personal experience and are able to relate inputs
they receive to the situations they are familiar with
or likely to be involved in. The selection, therefore,
both of faculty and participants in such programmes is
of great importance and may spell the difference between
success and failure of the events themselves.
Course content is the next major challenge. Corporate
governance and director obligations cover such a wide
spectrum of subjects and situations, it is well neigh
impossible to compress everything in a single programme
of manageable duration. The IIMB programme runs over three
and half days, which has been found to be the optimum
for Indian circumstances and perceptions. The Global Corporate
Governance Forum (sponsored by the World Bank and the
OECD) runs a six-day event (designed and directed by Prof
Florencio Lopez deSilanes of Yale and Mr Ira Millstein,
the well known corporate governance Guru and Senior Partner
of the leading US law firm of Weil, Ghotshal and Lmanges,
LLP) tailor-made to regional requirements. The Institute
of Directors in the UK and many other such Institutions
elsewhere in the world offer director training programmes
of durations varying from one-day events on specific topics
or developments to several weeks, whole time or part time,
and so on. Each programme eventually has to strike a balance
between content delivery and time affordable by prospective
participants.
Teaching pedagogy and academic rigour are important elements
in delivering programmes at these levels. A reasonable
collection of reference material and mandatory readings
would be a must for participants. Case discussions especially
having a bearing upon familiar domestic or international
settings seem to go down quite well with participants.
Contrary to popular belief that such director-level participants
are prone to be less inclined towards case readings and
analyses, preparatory to class room discussion, the IIMB
experience has been pleasantly different. Once the ground
rules for programme participation are established and
explained, participants were found to be quite diligent
and hardworking in terms of pre-class preparations. As
a recall measure, however, it may be useful for the programme
director or case-discussion leader to briefly recount
the key elements of the case (especially if it runs into
several pages, annexures and so on) so that the focus
of the intra-participant interactions and discussions
is maintained. An effective mechanism in practice is to
inquire which of the participants had gone through the
case in detail and was ready to summarize and make an
opening statement as a kick-off; this usually sets the
ball rolling and draws people into discussion including
those who are diffident starters. Another useful practice
that not only encourages participation but also keeps
the interest going in the class is frequent reality-checks,
asking participants to share their experience or how they
would approach the issues raised in the case.
While many of these programmes are geared to non-executive
and independent directors on the boards, experience has
shown that the presence of at least some executive and
whole time directors can significantly value-add to the
benefits of the course. Besides, it is also important
for the whole time directors to understand and appreciate
the dynamics of board processes and differing perspectives
so that their own skills in real-life board room management
get enhanced. In addition, of course, they bring valuable
insights from an executive directors’ perspective that
will be a great value-add in an academic ambience as opposed
to similar situations in practice, where more often than
not, the executive and non-executive groups may see themselves
protecting their respective turf and defending their positions!
III. Structuring the Programme
As indicated in the preceding section, the programme content
is driven by the twin factors of what needs to be delivered
and what time duration is available, taking into account
various contemporary developments in the field and also
based on the feedback from a representative potential
participation groups. To repeat a cliché, the programme
duration should not be too long to be boring and dragging
for the participants, and yet not too short leading to
inadequate handling of the content-delivery. At the Indian
Institute of Management Bangalore, the golden mean has
been found to be three and half days as noted earlier.
Content Structuring
Usually, there are two elements to content structuring:
the first deals with identification of the topics that
must be covered and the second, determination of the teaching
methodology and the choice of the appropriate faculty.
The Programme Director, usually the champion for the initiative,
would be the preferred person to draw up a desired content
outline, identifying key elements of inputs that are necessary
and desirable. It helps at this stage not to drop any
of the topics that come up for consideration; this could
be done later on after prioritizing the topics on the
two qualifying criteria of importance and relevance. There
are topics that are a “must” for a proper understanding
and appreciation of the dimensional aspects of the subject.
With regard to corporate governance, topics such as the
evolution of the corporate form of organization, the distancing
between ownership and control in modern business corporations,
and the accountability aspects of boards and directors
to shareholders and other stakeholders would form the
corner stone of foundational understanding and as such
they will rank very highly on both criteria. Discussions
on mergers and acquisitions and the boards’ role in such
transactions would of course rank high on importance but
in a country where such activities are frowned upon or
not permitted, their relevance in the programme would
be suspect. In a country like India where the public sector
and privatization debates are headline topics, they would
of course rank very high on contemporary relevance criteria,
but not in another country where the public sector is
not as overwhelming or privatization as controversial.
The relative ranking exercise would be helpful in deriving
a course design and coverage that are consistent with
the time slots available. If the latter are not sufficient
to cater to all the items ranked very high on the rating
scale, an appropriate extension of the programme duration
will be called for, either by adding days or by extending
sessions. At the Centre for Corporate Governance and Citizenship
in the Indian Institute of Management Bangalore, it was
possible to accommodate the desired topics by extending
the day and having pre-dinner sessions on all days. Positioning
sessions topics in sync with their timings is an art.
Thus, reasonably heavy sessions are best positioned in
the forenoon when participants are fresh, case discussions
are ideal for post-lunch sessions (especially if lunch
proves heavy!) because they involve participation, and
comparatively relaxed general input topics are good for
pre-dinner sessions. The same kind of logic also applies
to selection of speakers, witty and eloquent to drive
away participant fatigue, serious and sober when participants
are fresh.
Sequencing and flow of session topics are important considerations
in programme structuring. The Programme Director is the
ideal person to do this effectively since he or she has
conceived the programme content and would know which of
the topics should precede or succeed a session. Usually,
introductory sessions are good openings to set the theoretical
and contextual framework, while disparate elements and
situational inputs are probably the best to follow. A
concluding session may be used to pull together all the
strands and reemphasize the fundamentals in a wrap-up
or reflections slot.
While most Programme Directors would be familiar with
these ground rules of sessions sequencing, the biggest
threat to its smooth implementation invariably arises
due to unsuitability of certain time slots in case of
important faculty. In an effort not to miss out on a good
or star speaker, sequencing is tinkered around. Care should
be exercised in such efforts to ensure no major repositioning
of sessions is made that would seriously impede the logical
flow and build-up of the programme. Not always easy to
achieve, but any major failure to maintain a balance may
well lead to the programme performance itself falling
below expectations.
In selecting speakers and discussion leaders, care must
be exercised to choose the right persons for the topics,
some one who has had practical experience in handling
such situations or been a party to similar events. When
discussing a de-listing case and the directors’ role and
responsibility, it would not do to have a speaker who
has never had to handle such situations, if the person
if from business or industry or from professional practice.
Similar rules may not strictly apply to academics if they
were to bring in theoretical perspectives or they set
the basis for a case discussion when a co-presenter with
exposure could join in or take over.
An extremely useful design tool at the stage of conceptualizing
and determining the course structure is to invite constructive
critiquing from a “test” group or representative participants
and/or from institutions that have successfully handled
such programmes. The Global Corporate Governance Forum’s
approach in this regard is worthy of recounting. The Forum
was to hold a train-the-trainers programme in corporate
governance for participants from South Asia in July 2004..
In March 2004, the Forum convened a meeting in New York
to discuss the course design and structure specific to
the South Asia Programme: invited to this meeting were
representatives from the Philippines and Brazil, for whom
the Forum had earlier conducted similar programmes in
2002 and 2003; the National Coordinator for the South
Asia Programme, from the Indian institute of Management
Bangalore who had pioneered these training programmes
in the country; several advisers and consultants to the
Forum from different countries; and the main Programme
Directors, Prof De-Silanes and Mr Millstein, together
with the Forum’s secretariat leaders. The IIMB Programme
was commended and used as a basic input for the regional
programme requirements. Different sessions as proposed
and delivered earlier were reviewed and debated, and a
final set was hammered out, retaining the most important
and the most relevant to the regional requirements. To
complement the US Directors, the Indian Coordinator was
invited to join in as part of the directing group. Speakers
and discussion leaders were suggested, discussed and decided
on grounds of suitability and experience. Thereafter the
course material work was to be pursued. This is a classic
method in an international context for designing and structuring
a course that would at once be relevant and important
for its participants.
Sticking to the Script: The Tight Rope
Once the programme content and structure and the speaker-leader
lists re finalized, the next important element in course
delivery is to ensure that the sessions go through as
intended, and the speakers and discussion leaders play
their appointed roles! This is often easier said than
achieved, especially in case of guest faculty. It is not
their fault, either, since most Programme Directors content
themselves by inviting the guest speakers and providing
their session titles. The guests, often busy executives,
do justice to their topic without any specific reference
to where and how their session fits into the overall design
of the programme itself. Catchy session titles are also
often guilty of encouraging overlapping discourses.
At the Centre for Corporate Governance and Citizenship
at the Indian Institute of Management Bangalore, the perils
of leaving this to chance were realized long ago! To minimize
repetition and overlap, as well as to preempt some topics
falling between the stools and being left uncovered in
any session, a Programme Content paper is prepared well
in advance, and is sent to speakers at each of the sessions.
The note outlines the objectives of the programme, its
participant profile, and contains a summary of what is
expected to be covered in each of the sessions, in the
entire programme.
The advantage of such pre-programme intimation is that
it seeks to bring the speaker up to speed not only as
to what is required to be covered in his or her session,
but also what is being covered in other sessions, thus
setting the speaker’s session in context. Many guest speakers
have commended this approach and indicated how it had
helped them to structure their presentations, in the full
knowledge of what is planned to be covered in the other
sessions. Has this completely eliminated duplication or
overlap? The answer, regrettably, is not entirely, but
the good news is that most of it is avoided and the participants
are the eventual beneficiaries of more complete coverage
as intended.
Participants Feedback
The proof of the pudding, as the saying goes, is in the
eating. In the final analysis, the success of the programme
has to be measured on the satisfaction ratings that participants
provide. For the Directors Programmes, the IIMB Centre
obtains two sets of feedback: one is received at the end
of the Programme in a Reflections Session orally, as well
as in writing (anonymously if desired). The second feedback,
which has only been just initiated is a system of seeking
views a year or more after the Programme, to assess the
extent of internalization of programme benefits and practical
usefulness of the programme sessions and topics. The immediate
feedback and reflections sessions have been more than
satisfying and have helped in continuously upgrading and
enriching the offerings. The preliminary responses that
have just started coming in indicate a high level of internalization
and practical utility of the programme contents. This
is a trainer’s delight, to know that the programme objectives
were more than met not only momentarily but on a sustainable
basis after several months.
IV. An Institutional Framework of Director Orientation
& Preparation
Director Training and Preparation initiatives are relatively
of very recent origin in the country. The first specific
Director Orientation Programme conducted by the Indian
Institute of Management Bangalore, generally recognized
as the pioneering effort in this field in India, was held
in 2001, and have been held annually since then. At a
general preparation level, the MBA Programmes at IIMB
have had a Corporate Governance Elective Course for the
last several years, and prior to that a Programme with
similar objectives but slightly different focus on Enhancing
Corporate Performance in terms of Shareholder Wealth maximization
had been offered as an Elective since 1994. More recently,
the Institute also offers a Core Programme in Ethics of
Public Decision Making, and an Elective Programme on Public
Policy Perspectives in Corporate Governance for mid-career
civil servants in the MBA level Programme on Public Policy
and Management. Several other organizations and Institutions
have since commenced training programmes in corporate
governance, not all of them directed to or focused upon
directors.
The earliest recommendation relating to director training
was made in 2000 by a Union Government Department (now
Ministry) of Company Affairs appointed Committee on Corporate
Excellence through Governance. The Report mentioned:
“On the one hand, companies will be looking for competent
and independent persons of professional excellence and
personal integrity to populate their boards. On the other
hand, the trend towards fewer directorships and committee
memberships would gain further momentum to enable independent
directors to focus on the affairs of their reduced number
of companies to be able to deliver. The demand-supply
gap in the field of trained independent professionals
available for board positions in listed corporations is
thus likely to be of a significant magnitude in the near
future. The transformation processes towards greater professionalisation
taking place in family controlled business is also likely
to compound this problem even further.
“It does seem that there is a pressing need for an institutionalized
framework creating a nucleus organisation where full time
and non-executive directors including those aspiring,
or being groomed for such positions of responsibility
may have a window on what is happening around the world,
and to prepare them to shoulder the increasingly onerous
responsibilities. Similar organisations such as the Institute
of Directors in the UK and the National Association of
Corporate Directors in the US, exist elsewhere for providing
training and professional and research support to corporate
directors.“
The Report went on to suggest the establishment of a Centre
for Corporate Excellence to further these objectives.
In pursuance of this recommendation, the Ministry of Company
Affairs have now constituted a National Foundation for
Corporate Governance as a separate Trust with collaboration
from the Industry Chambers and Professional Bodies. The
Foundation has accredited as National Centres for this
purpose, the Centres for Corporate Governance at the Indian
Institutes of Management Ahmedabad, Bangaloe, Kolkatta,
Lucknow, and the Administrative Staff College of India
and the Indian School of Business, both at Hyderabad.
With these Centres accredited, it is likely that the Director
Training initiatives will get a boost and academically
rigorous and practically useful programmes would be offered.
Several other professional and capital market bodies have
also started offering programmes in corporate governance,
and to the extent this helps in further recognition of
the importance of the subject and leads on to capacity
building, such efforts are to be welcomed. Eventually
the markets will have to decide which of the programmes
on offer the best value for their time and investment.
Institutionalizing Directors Training, Orientation
& Guidance Initiatives
There is also perhaps a need for an alliance among the
leading Institutions to provide ongoing guidance and knowledge
dissemination. The Institute of directors in the UK has
been a pioneer in this field. Several institutions have
come up in different countries around the world, some
with and many without any linkages to the Institute of
Directors in the UK. The National Association of Corporate
directors in the US is more oriented towards research
and publications of value to company directors. An appropriate
model for institutionalizing such efforts in India would
be welcome and must be pursued. Till then, the mantle
of academically rigorous director training and orientation
would appear to rest with the nationally accredited Centres
referred to earlier.
An important dimension in such training initiative is
the concept of partnering between and among organizations
with complementary skills and organizational frames. Such
partnering will also minimize scarce teaching and research
resources being wasted in competing programmes. Since
director training is not mandatory in India (and it should
preferably remain so for good reasons), the market for
such training has to be built up through the quality of
the offerings and the value perceived by the participants.
Replicating such initiatives without suitable market development
is more than likely to be a futile and fruitless effort.
Institutions should also seek to focus on areas of their
professional or academic competencies rather than simply
acting as event managers trying to bring participants
and borrowed faculty together. Elsewhere in the developed
world, numerous such efforts have fallen by the way side
and there are lessons to learn in such experiences. Collaborative
efforts should therefore be the preferred route between
and among complementary institutions.
Towards a Certification Programme?
This paper has almost exclusively dealt with training,
guidance and orientation of incumbent company directors.
There is a further dimension that perhaps also needs addressing.
India needs independent non-executive directors by the
thousands to populate corporate boards. This situation
will be further exacerbated when either due to mandate
or of own volition, incumbent directors seek to reduce
their number of directorships in companies. Being a director
is a demanding task and not many can handle several such
positions (often in addition to their own substantive
full time avocations) on a part time basis, especially
with increasing shareholder and stakeholder activism.
Under these circumstances, one should indeed ask the question
whether there is not an emerging need for a certification
programme that trains and equips people to take on directorships
in companies on a professional basis. The programme could
be of six to twelve months duration, perhaps part time,
and endeavour to provide a thorough grounding leading
to a Certificate in Corporate governance or Corporate
Directorship. The thought is very preliminary and certainly
can do with much further refining and debate. What it
would provide of course is a growing number of professionally
and otherwise qualified people being equipped to take
on directorships with a mature understanding of what is
involved in such assignments.
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