The most effective board members are hungry for information—and the most effective boards provide ample opportunity for their directors to learn about professional/industry trends and acquire new skills. With board oversight rapidly expanding to include emerging risks (e.g., cyber, environmental impact) and growth opportunities (e.g., blockchain, global markets), board education can become an important baseline for fulfilling one’s fiduciary duties.
While most boards of directors recognize the importance of education, the greatest obstacle is usually time. Not only are board agendas more packed than they’ve ever been, but board members typically have busy professional and personal lives outside of board service.
[Board members] are busy. They’re very well educated. They tend to be really experienced…There’s going to be a little bit of a hesitation [around board education because] they don’t want to waste their time.
— Dan Siciliano, Faculty Director, Rock Center for Corporate Governance & Associate Dean, Stanford’s Director’s College
The nominating and governance committee typically manages the board education program, whether bringing subject-matter experts into the boardroom or allocating a budget for individual director education (e.g., conferences, peer exchanges). The best approach to education will vary by board; yet, all boards should have a plan in place.
Identify Knowledge Gaps
Designing a board education program should always begin with board member feedback. Nominating and governance committees often use insights from the annual board assessment process to identify knowledge gaps: Where do the directors feel that board knowledge is lacking? Sometimes, gaps are best filled by recruiting a new director; other times, board education is a better avenue for addressing deficiencies–particularly when the whole board needs to be brought up to speed on a certain subject matter.
Develop a Roadmap
Once the opportunities for board education have been identified, the board and/or nominating and governance committee should set goals specifying what the board hopes to accomplish. Does each director want to obtain a specific cybersecurity certification by end of the year? Or, does the board simply want to bring in a speaker once a year to challenge board members with an outside perspective? The nature of board education goals can vary widely. The point is, what gets measured, gets managed.
Don’t Overlook Education at the Individual Level
New and tenured board members alike can benefit from interacting with other directors on a regular basis. Conferences and peer exchanges can be especially valuable, where directors get to learn about different ways that other boards are tackling the same challenges. In his episode, Dan Siciliano, Faculty Director for Rock Center for Corporate Governance and Associate Dean, Stanford’s Director’s College, explains how the most effective boards are structuring the education budget for individual directors.
Setting the Right Tone
Boards that are committed to board education are the ones that tend to reap the greatest benefit. This often comes back to board culture and the expectations that are communicated to all incoming directors. The board chair or lead independent director is often responsible for setting the tone in the boardroom and encouraging a culture that values education and continued learning. Effective board members use educational opportunities to challenge their worldview and think in ways they typically would not. Tone at the top can be just as powerful in the boardroom as it can across a multinational organization.
Board Education Materials via Diligent
Did you know educational resources are available in your Diligent app? We partner with top content providers from across the industry including NACD, McKinsey & Company, PwC’s Governance Insights Center and Spencer Stuart to name a few. Through these content providers, and Diligent’s own initiatives (e.g., “Inside America’s Boardrooms,” Diligent Research Institute), we deliver research, articles, videos and actionable frameworks in the place where you already access your board materials. Click here to learn more about accessing Diligent Insights within your app.