SMEs Cooperate Governance: Director’s Training and Development to Optimize Board Effectiveness.
The board plays a critical role in determining the success and overall direction of an SME.Research has proven that a well governed business is not only able to attract investors but it also outperforms those with weak corporate governance practices.Good governance starts with having a strong board with the right skills set to guide the company. Most corporate governance codes recommend that directors should undergo continuous training and development to improve their skills and knowledge.Board training and development has several benefits:
- It gives directors an opportunity to improve their competencies and enhance their skills.
- It boosts the performance of the board.
- Each director can better understand his/her role and responsibilities.
- The board is kept up to date with the latest corporate governance best practices.
Investing in the training and development of directors results in the overall effectiveness of your board.
To maximize the benefits of training and development, it is important for the board to make a training and development plan that aligns with Board’s calendar. This can be done in two ways:
- Conducting a board evaluation. A board evaluation examines the board structure and composition where it aims to determine if the skill sets and knowledge of the board are in line with the overall company strategy and direction.
Such an evaluation is a key tool in identifying training and development needs for the board which would then make up part of the training and development plan.
- Carrying out a director’s skills assessment. A skills assessment tool can identify individual director’s strengths, weaknesses and highlights areas of improvement. The results from the exercise can be used to give input into the training and development plan.
Some of the training and development programmes that the board can benefit from include:
Membership to a professional body
Board members can join an established and reputable professional body such as the Institute of Directors (IOD).
Such membership gives directors the opportunity to have access to a wide range of information and resources. A member can undertake free professional training and development courses/activities. It is also a great networking avenue where members can share knowledge with other directors.
Pursue professional certification
Your SME board members can opt to pursue professional certification such as the Chartered Director or Professional Director Certification Program.
The Chartered Director is the ultimate professional qualification a board director can have. The Chartered Director qualification has been tailored to provide directors with the skills needed to carry out their roles across a broad range of activities.
It is a progressive qualification where directors first undertake a Certificate in Company Direction, this is followed by the Diploma in Company Direction then finally the Chartered Director qualification.
Training and Development Programmes
Various organizations provide training and development programmes tailored for directors. These programmes can be in the form of classroom sessions, workshops, conferences, webinars, and forums. The board nomination and remuneration committee can work to identify such training in line with the development needs of the board.
A high performing SME board has a direct impact on your business success and long-term sustainability. Therefore, it is importance to invest in enhancing the skills and knowledge of your directors.
About the Author:
Nazih is a Chartered Director and a member of the Institute of Directors (www.IOD.com) and the GCC Board Directors Institute (www.GCCBDI). He is a seasoned business leader who leads SMEs awareness programmes to strengthen their corporate governance practices.
Visit his LinkedIn profile here.