CEO Report AICD Review

Director skills: A wise investment

The AICD exists to support the professional development of Australia's company directors by providing for their education and information needs. During the past two months we have seen a significant increase in demand for the education courses and professional development services, including publications, we offer. Most of the demand has come from individual directors who are clearly seeing the recent high profile media reporting of the failure of a number of companies as a "wake-up" call to review their contemporary knowledge on directors' roles and responsibilities. The AICD publications on Duties and Responsibilities of Directors and Officers and the Code of Conduct have been very popular, as they provide practical and easily-read advice on both the legal obligations and the ethical standards required of directors in Australia. These books and most of the others in the AICD publications list look beyond compliance with the law to assist directors to perform effectively, not only in the interests of the companies they serve, but also in the interests of the community as a whole. Sustainable corporate performance depends not only on a healthy bottom line but on business being an active part of the community in which it operates.

While a director's individual action to enhance performance is laudable it is important that the companies they serve also contribute to enhanced board performance. It is normal practice for companies to have formalised development plans for executive and senior staff to facilitate their personal development. There is a strong case to be made for the company to similarly support its board members. Options for continuous development of directors' skills and education may be by formal study, as provided in the AICD Company Directors Course, or through shorter duration seminars and training sessions such as the New Director Program, the Skills Update Program, Board, Director and CEO Assessment, the Role of the Chairman or Going Public, all offered by the AICD in all states. In addition to encouraging companies to support continuous education and development for individual directors there are benefits from having board development activities. These may include induction programs when significant change occurs to an organisation, such as a merger or new business acquisition, to gain a better understanding of how the company operates. Alternatively, a range of individually tailored development programs are available from the AICD to help boards work more effectively together or to facilitate strategic planning.

Company support for training and development of board members, both on a whole-of-board and an individual basis, can improve board effectiveness and bring management and the board to a closer understanding of the dynamics in which the board operates. How could companies provide this support and development? In the same way they provide for staff development. The board could set aside specified amounts to fund each director's personal development plan, which may be agreed with the chairman. The board, as a whole, could consider group educational development proposals to complement company activities. I was very impressed that one high-profile board chose, as a group, to attend this year's AICD National Conference in Hobart. This board not only held its regular board meeting in conjunction with the National Conference, it also held other meetings to develop informal links between members within the context of the conference which provided a strong future focus. Every board needs to be proactive in ensuring that it keeps up to date with not only company operations and activities, but must also ensure it has the collective skills to lead the organisation into the future.

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.