Peter Crow
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Governance and professionalism: time to raise the bar

9/9/2012

2 Comments

 
Last week, I was invited, with 16 others, to help review a Competency Framework being proposed by the Institute of Directors. I commend this initiative, aimed at raising the bar. While competency of itself does not guarantee that any director will be effective, it is a move in the right direction.

During the wide-ranging discussion, several participants suggested that governance should be professionalised, like medicine, accountancy, law and several other professions. I support these calls—strongly. Why? Well, stories like this get under my skin. While the majority of directors fulfil their legal and ethical responsibilities well, sadly there are a few bad eggs that discredit governance in the public's eyes.

The mechanism would be relatively straightforward, involving perhaps:
  • entrance tests (competency, references and interviews)
  • maintenance of professional standards (on-going education)
  • periodic re-registration (two- or three-yearly)
  • tiering (a general registration, and a higher level for directors of large, widely-held or publicly-listed companies)
  • a disciplinary tribunal (with teeth and a propensity to act)

The IOD's optional accreditation scheme provides a useful starting point, but it falls short because participation is optional. In my opinion, governance must be professionalised, with a robust body and process not dissimilar to medicine (Colleges of Practice, Medical Council of New Zealand, Disciplinary Tribunal). Perhaps then the concerns expressed in the article—that directors can dodge bans—will become a thing of the past. Here's hoping.
2 Comments
Nicholas Benes link
17/9/2012 13:20:52

Peter - spot on, I could not agree more. Long-term, that is the direction we would like to go - or at least facilitate - at The Board Director Training Institute of Japan (BDTI), which I head up here in Tokyo, - summary: http://bdti.or.jp/english/introduction . It is absurd that my barber and my mechanic gets licenses, I had to take the bar exam to become a lawyer, and CPAs take a test...but for the most part and in most countries one needs absolutely no minimum knowledge or updating of such knowledge, to serve as a director.

Reply
Peter Crow
17/9/2012 13:28:55

Thanks Nicholas, appreciate your supportive comments. I will look at the BDTI site with interest. Let's keep in touch.

Reply



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Peter Crow PhD CMInstD

Company director | Board advisor
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