Training for Boards of Directors

July 21, 2008
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, NAIROBI, July 21 – They may be smart, seasoned executives, but company directors still can, and should, benefit from training.

There\’s a myth that governing boards comprise of wise, all-knowing executives, banded together to independently protect shareholders and corporate viability. According to that view, these gurus don\’t need training.

But Stephen Kelly, director of BBC People, doesn\’t see it that way. The human resources (HR) department, he says, has a significant role in strengthening the board. At the BBC, Kelly takes a subtle approach, coaching executive board members outside the boardroom, presenting a sounding board for the CEO and chairman, and providing insights into the unspoken messages telegraphed around the boardroom. Such quiet coaching can be invaluable, but HR\’s input is becoming more formal and obvious.

The notion that governing boards benefit from structured training reached a critical mass soon after the Enron, WorldCom and Arthur Andersen scandals leapt into the headlines.

So, how can boards partner with HR?

Although boards usually stay behind a ‘firewall’ separating them from daily operations, a few HR executives recognized the synergy between their strengths and the areas in which governing boards sought training. By forging strategic partnerships, they managed to leverage their expertise for the direct benefit of the board.

The key to successfully involving HR is to use its insights in ways that are relevant, useful, and engaging, so that it is seen as a strategic partner.

Whether HR\’s involvement with the board is strategic or merely logistical depends on how broadly HR is defined.

The perception of HR as a strategic partner is crucial to its ability to enhance board training. To succeed, HR directors must counter some widely held perceptions, among them that HR executives tend not to have the same holistic view of the company as other senior management teams, and that they tend to be risk adverse.

There also is some concern that training provided by management—or selected by in-house personnel—could compromise the board\’s independence.

Basics and More

However training is approached, it is increasingly viewed as vital to the health of the company and its governing board. The focus is evolving from basics such as ethics to such issues as enterprise risk management, executive compensation, investor expectations and communications, government practices, and reputation management.

Even when employees and directors have the same training needs, it\’s better to have separate sessions. Directors are usually on the same page, so they can discuss more complicated issues and have debates that aren\’t possible in groups with more disparate levels of experience.

Some of that training can be handled in-house, using either outside experts or members of the management team as speakers. Internal education has the advantage of letting the board focus tightly on its own issues without risk of breaching board confidentiality.

This week’s quick tips;

The ‘firewall’ between boards and the companies they govern tends to be strong, but definitely not insurmountable. To help strengthen board members\’ skills:

• Focus on the areas of expertise that you can bring to the board. Approach the Corporate Secretary, Chief Executive Officer, or General Manager to discuss the board\’s key concerns in terms of the expertise you can bring to specific programs.

• Combine external and internal training for best results.

• Use real-world examples from that company\’s own experience when you address the board.

• Become the organisational conscience, watching the subtle signals among directors to keep executives apprised of what\’s going on and focused on what\’s really important.

• Facilitate dialogue within small groups, perhaps board committees, to address the core issues. Save the seminars for broader training.

Magu Ngumo is a lead Consultant with Indicative Solutions, a local management communications and training company. He can be reached at [email protected]

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