boardroom
Greater emphasis on education around corporate gover- nance has largely been driven by directors and would-be directors who are keen to have a greater understanding of what is required of them. However, a growing aware- ness at chair level of the need for a wider mix of skills in the boardroom has also contributed to the shift. DeirdreHannigan, chief risk officer at GE and a recent
recipient of the chartered director qualification from the Institute of Directors in Ireland (IoD), decided to do the programme to gain a better understanding of her role and responsibilities after first becoming a director. “My main driver was to ensure that I had the skills to fully equip me to perform the job in an efficient and profes- sional manner,” she says. Being fully informed about various legislative changes
and understanding the role is becoming increasingly important, Hannigan believes. “Given the increased level of scrutiny, directors are a lot more aware of their responsibilities. The environment is changing constantly. I think it’s very important that directors are aware of what’s going on around them, keep up to date with the changes and have the skills to adapt and embrace the changes.” The need for ongoing professional development for
members of boards is also driven by the sheer speed of change going on. “It’s a bit like watching a child grow- ing up. If you see them every day, you don’t realise they’re getting bigger. If you see them again after a long time you see a huge change. You actually don’t realise how quickly things are changing and how many changes are happening. Spending time on professional development is key.” Sylvia Cronin, CEO of Augura Life Ireland, who also
recently achieved the chartered director qualification through the IoD, says that the way in which people are selected for boards has progressed in the past few years and this has put a greater onus on the need to have cer- tain skills. “In the past, people may have been put on boards because of their expertise in the particular industry that
the company operated in,” she says. “For example, if you were in financial services the board tended to consist of people who were expert only in the financial services arena. “Within the past five years I think there has been a
realisation amongst companies that in order to have effective board membership and board performance, you need to have a mix of skills – industry expertise, finance, sales, legal, operations, corporate governance, and so on. And I think that has driven the need for people to improve their competence in terms of board membership. “Now there’s greater emphasis on board performance
and there is evaluation in terms of how members are conducting themselves as board members – the effectiveness of the board chairman, reviewing board composition in terms of the board structure and the def- inition of roles of the members of the board is becoming a lot more prevalent.” Having a formal qualification helps to bring balance to
the board, Cronin believes. “To me it’s crucially impor- tant in terms of board balance. There does need to be corporate governance expertise. What you then have as a chartered director is the confidence that you are doing this aspect of the job properly and you can also become a learning springboard for other members on the board.
Education v regulation While 70pc of directors in a recent IoD Ireland survey said that increased regulation is the only way that cor- porate governance standards can improve, both Hannigan and Cronin agree that education could reduce the need for more legislation. “There is a risk in the current environment that there
would be too much regulation,” says Hannigan. “What you don’t want is regulation for the sake of it. Having to tick the boxes is not what you want. People need to walk the talk. It’s about making sure that what is being done is real and the skills are there to make sure that’s hap- pening as opposed to, say, having to have six meetings
‘Within the past five years I think there has been a
realisation amongst companies that in order to have effective board membership and board performance, you need to have a mix of skills’
Winter 2010 Irish Director 35
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