Director training and education is one of the keys to ensuring boards can fulfill their duties while adapting to changing circumstances affecting the company. Corporate secretaries and other governance professionals play the central role in planning for necessary information to be passed to the board, either from themselves or through in-house or external advisers.
There’s no one-size-fits all approach but there are important lessons to help the board succeed and avoid potential problems. An effective director training program helps create a foundation for a high-functioning board that can oversee risk and strategy effectively while understanding the needs and interests of shareholders and other stakeholders.
An unsuccessful program can have the reverse effect. ‘If a director speaks to an institutional investor and [he or she is] not prepared it can have implications for the organization,’ says Joan Conley, board member at EJF Acquisition Corp and Tigo Energy and former corporate secretary of Nasdaq, in Governance Intelligence’s recent Governance Playbook on the topic, which contains advice from a range of experts.
One of those experts is Angela Grant, chief legal officer and corporate secretary at Palomar Holdings, who in the latest episode of the Governance Matters podcast discusses how director training works at her company, how to identify the kind of topics directors might need more information on and bringing in outside experts, among other things.
‘The importance of director training is directly tied to the health and wealth of the organization the board is overseeing, because if [the board] is fully informed and knowledgeable about what’s happening in the industry it’s supporting and/or the regulatory framework, it can give much better advice and counsel to the executive team,’ Grant comments.
It’s important to include different forms of director training in the program, depending on the circumstances and topic, experts say. ‘We typically try to have any sort of director training that’s in-person during the time we’re all together… I think people learn from each other, and it’s much easier to ask questions when you’re all sitting around the room together,’ Grant explains. ‘But sometimes, you know, we may have to have people just do their own individual training and they come back and share what they’ve learned, which is also great.’
The Governance Matters podcast provides listeners with insight into cutting-edge issues of the day for corporate secretaries, general counsel and other governance professionals. The series looks at how the roles of governance professionals and the board – as well as the landscape in which they operate – are evolving.
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Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
