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This morning, I was reading the local (London) paper and saw an ad for a training class in governance for non-executive directors (affectionally called “NEDs” here). It set me thinking. Maybe dreaming is a better word.

What if:

  • Directors were required to take training classes in corporate governance?
  • The training had to be certified by a recognized authority as including guidance on all topics relevant to effective board and director performance (which would include topics dear to my heart such as the role of internal audit, oversight of strategy and risk management, executive compensation, responsibilities to the shareholders, etc.)?
  • Each year, the board was required to disclose that each of the directors had received the necessary and appropriate training to perform their duties, including training in corporate governance?
  • Boards had a code of governance that each director was required to sign annually?
  • Each year the board was required to disclose not only that assessments of performance had been performed at board, committee, and director levels, but what the results were?

Would this be beneficial, superficial, or a waste of time?

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  1. Former Member

    Nice ideas, which are unfortunately difficult to implement. Boards will not decide on measures which will limit their freedom and potentially raise liability issues.
    New requirements on CFOs are a step in the right direction, but as far as boards are concerned, more state intervention or shareholder activism would be required.
    Last, a system of sanction would be required for addressing board members abuse. The state would probably be again the last resort, as companies are often reluctant to sue former board members.
    Now find qualified civil servants for this mission…
    A systemic change is required, but until then, more radical thought about governance are required 😉


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