A Radical Thought About Governance
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?
Posted on Feb 17, 2011 by Norman Marks
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I think it would be beneficial. However, I am not sure that it we would avoid corporate scandals etc. due to this. But I think there is a need to enforce requirements (other than general legislative responsibility requirements) and provide guidance to the directors. I could even add a bullet to your list: each year the board should be required to disclose the meeting attendance of each of the members both at board and committee level as I think this would be to the interest of the shareholders to elect board members who are fulfilling their responsibilities.