The Higgs report highlighted the need for director training, and the Institute of Directors has risen to the
challenge by constructing a framework for developing high-fliers. DeeDee Doke
reports
The phrase ‘corporate governance’ seems to be on the lips of everyone in
business.
From the boardroom down through the ranks, global business has been trying
to come to grips with the fallout from the Enron and WorldCom scandals, which
resulted from shoddy oversight at those companies’ highest levels. More
recently, even in the UK, where corporate governance has enjoyed the reputation
of being the world’s best, recommendations set out in the controversial Derek
Higgs report on company direction have had business leaders scratching their
heads as they consider the way forward.
One of Higgs’s recommendations in the January report called for better
training for non-executive directors. However, well before the report’s release
or even its commission last year, two unrelated businesses – Serco Group, a
global infrastructure management services company with headquarters in the UK
and £1.3bn turnover in 2002, and Mourant, a Jersey-based legal and financial
services firm – had seen the writing on the wall: corporate governance was an
issue whose time had come for exploration by company high fliers on their way
up.
"The role of a leader in our business is changing," explains
Christian Morgan-Jones, director of Serco’s best practice centre. "Our
business is changing, and leadership in the 21st century is changing. We’re on
a journey which is taking us into that new domain."
For Mourant, the goal was slightly different. Many of its high-level
workforce already had layers of professional qualifications, accreditations and
initials after their names. But a restructuring was under way within the
business that demanded a revitalised approach to developing company strategy.
Also, Jersey’s highly competitive recruitment market for top-level
professionals requires employers to stay attuned to training and development of
interest to its workforce – as well as offering qualifications and experience
that will appeal to an elite client base.
"We started looking [in 2001] for director development: what could we
offer to give them even more skills?" says Mourant training director Carol
Graham. "We looked at lots of programmes."
Both companies found their answer in the Institute of Directors’ company
direction diploma programme – entirely independent and unaware of each other.
The programme’s seven modules included finance for non-finance directors, HR,
law, change leading and direction, and strategy, and under the standard
programme, would culminate in an exam for a diploma in company direction.
But Serco and Mourant also sought new twists to the equation: first, the
training had to be tailored to their individual companies; and second, each
wanted fewer modules than in the usual programme. The third requirement was
that this bespoke programme led to an exam and an accreditation – in this case,
a certificate – in company direction.
"Both companies had the clear idea that they wanted a benchmarked
activity which had an external value from a neutral provider," emphasises
Karen Bayless, IoD’s commercial manager.
"We hadn’t done that before," points out John Weston, IoD’s
director for director development. "We had done development programmes in
one-off inter-ventions, but none with an exam."
A proposal was put together to be studied, authorised and approved by
various internal committees. What had to be determined was how much of the
training would stick strictly to the IoD syllabus, and how much would
incorporate company-specific information. "This took a bit of to-ing and
fro-ing, but eventually we got the go-ahead from the committees," Weston
says.
From the IoD’s standpoint, the conditions were virtually perfect to create a
pilot programme. "You couldn’t get two more different types of
companies," Bayless says. "If we could pilot this new programme with
benchmarking in two such diverse organisations, and it is proved to be valid,
strong and good for both, then we know that it’s valid, strong and good in its
own right – that it is appropriate for any kind of business organisation."
Once IoD authorities had agreed to a pilot programme, work began on deciding
how the IoD syllabus materials could be contextualised for the bespoke
offerings. Ultimately, the key lessons remained true to the IoD syllabus, but
the case studies were the companies’ own and were selected to illustrate their
current issues. "You’ve got a live case study in front of you, and all of
the people in the room are familiar with the case study because they’re working
in it. So it’s absolutely live learning," says Weston.
Both companies kicked off their programmes in January 2002, with just over a
dozen participants each undergoing individual certificate programmes. In April,
they took the exam, which tested them only on the modules they had taken. Most
students in each company passed, receiving their certificates, and as a group,
they scored above the national average. "The fact they are scoring higher
than the national average indicates to us that the learning is easier to learn,
apply, understand and use," Bayless says.
Within the companies, the programmes were so well received that Mourant and
Serco reconsidered their initial decisions to stop their individual programmes
at the certificate level. Both now are proceeding with the full diploma
offering – "which I find very interesting because both were very clear at
the outset they didn’t want the four remaining modules", says Bayless.
"But they’re now so energised and excited about how it has gone that they
are going on to do the remainder."
The IoD plans to offer this variation of its company director training to
new clients – not a minute too soon, as demand for IoD corporate governance
courses has increased significantly since the Higgs report was released. Weston
credits the Higgs report with raising awareness of the need for such training:
"What Higgs has done is put the imperative behind it."
Additional resources:
– The Effective Non-Executive Director conference takes place on 20 March,
IoD, London. Call 020 7766 2601 or check www.iod.com for information
– Directors’ Liabilities: Protecting Yourself, Your Business and Your
Reputation, takes place on 26 March, IoD. Contact details as above
Weblinks
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