Policy Dialogue on Corporate Governance in China
“Director Training and The Role of The
Institute of Directors”
The Singapore Experience
Presented by John K M Lim
President
Singapore Institute of Directors
Shanghai, China
25 – 26 February 2004
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
“Director Training and The Role of The
Institute of Directors”
- Why the need for director training and
development ?
- What have we done to date ?
- Where do we go from here ?
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Singapore Institute of Directors
-
founded in July 1998
National association for company directors in Singapore
Governed by a council headed by a Chairman and a President
Key roles are :
- To act as a forum for exchange of information on issues relating
to corporate governance and directorship in Singapore
- To organise and conduct professional training courses and
seminars to meet the continuing needs of its members and
company directors
- To regularly publish newsletters, magazines and other
publications to update members on relevant issues and
developments
- To be responsible for the discipline of members
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Singapore Institute of Directors
Mission Statement
“To promote the professional development of
directors and corporate leaders and encourage
the highest standards of corporate governance
and ethical conduct”
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Only organisation to provide comprehensive focused
director development programme
- Works in collaboration with other professional
bodies, institutes of higher learning and
regulatory/government agencies
- Has more than 1200 members of which 3% are
Affiliates
- Has pivotal role in director training in Singapore
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
The Need For Sound Corporate
Governance
- Development of Singapore as a leading global
financial and business hub dictates it must develop,
adopt and promote international best practices in
corporate governance among its companies
- Institutional investors, both local and international,
have clearly indicated importance of good corporate
governance in their investment decisions
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
The Need For Director Training and
Development
- Board is apex body collectively responsible for
corporate governance and success of company
- Effective board is central to good governance
- Skills, knowledge, mix and independence
directors central to board effectiveness
of
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Increasing demands on boards and individual directors
- Board committees
- Investor activism
- Skills/knowledge levels among directors and standards
of corporate governance among listed companies vary
considerably
- Concerns on director skills and independence
- Complaince in form vs complaince in substance
- High level of transparency and disclosure not
synonymous
with
management
practices
of
smaller/family dominated companies
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Features of an Effective Board
- Have relevant collective skills, knowledge and experience
- Can work cohesively as a team
- Have sufficient degree of independence and integrity
- Are prepared to devote sufficient time and resources to the
affairs of the company
- Can provide the strategic and entrepreneurial leadership to
the company
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Have a comprehensive and formal director induction
programme
- Have a programme of continuing professional development
for directors
- Have formal board performance evaluation and individual
director appraisal
- Have well
succession
defined
plans
and
processes
for
board
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Continuing director development and training essential for
improved board performance
- Most effective if combined with proper selection and formal
board performance evaluation
- Institutes of directors must play lead role in promoting and
implementing director development
- Development programme can consist of both formal and
informal sessions
- Programme must meet needs of different categories of
directors
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- SID has been conducting training for directors since September
1999
- “Company Directors Course” comprising 4 modules of 2 days
each form the foundation. To date SID has conducted 52
modules and trained more than 800 directors and prospective
directors
- Half/full day workshops on specific topics supplement core
programme
- Directors’ handbook and national surveys
- Programmes implemented in partnership with other professional
bodies, institutes of higher learning and regulatory agencies
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
The SID Company Directors Course
The Company Directors Course aims to provide the
foundations for directors and would-be directors to
understand their responsibilities, hone their skills
and learn new knowledge to improve their practices. This
will protect directors of the statutory and moral liabilities,
and enhance their performance as leaders of their
organisations. The course comprises 4 modules, each of
two-day duration :
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Module 1 : The Company and Corporate Directorship
This module provides delegates a firm understanding of the
company as a business entity, and how it functions as one.
It covers key roles and responsibilities of directors, and
potential pitfalls in corporate directorship with regards to
their liabilities. It serves as a foundation for future
modules in more complicated aspects of corporate
regulation, administration and finance.
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Module 2 : Getting the Best from Your Board
This module discusses the structure of the board, how it is
organised, and the special duties of the Audit Committee.
It introduces the various components of a director’s duties,
and how he or she can be effective in the boardroom and
yet remain independent. The Chairman’s role and his
relationship with the CEO and the board are also covered
as well as special situations.
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Module 3 : Strategic Management – Concepts &
Techniques
This module gives an overview of Strategic Management
including frameworks for conducting industry analysis,
setting competitive strategy and building core
competencies. It discusses strategic planning models and
how a company can constantly produce effective
strategies.
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Module 4 : Finance for Directors
This module covers responsibilities of directors pertaining
to disclosures in financial statements from both the legal
and best practice standpoints. It provides delegates who
are not trained in finance an understanding of financial
analysis, risk assessment and management and capital cost
and investment so as to allow them to contribute
meaningfully in boardroom discussions. Individuals with
financial qualifications and experience may be exempted
from module 4 : Finance for Directors. The SID reserves
the rights to grant this exemption.
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Current Status of Director Training in Singapore
- Director training not mandatory
- Director training still not an established practice in listed
companies
- SID Board of Directors Survey in 2002 of listed companies
revealed that out of 120 respondents :
- Only 22% sent their NEDs for training
- 13% or more than half of the 22% indicated their NEDs
received between1 and 4 hours of training
- 4% received between 5 and 8 hours
- 5% received more than 8 hours training in the past year
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Challenges
- Greater participation from companies across the board
- Programme to include greater emphasis on practical
skills development
- Provide sufficient mix of programmes to accommodate
differing needs
- Greater formal recognition of director training by
regulatory agencies
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Key Thrusts – 2004 / 2005
- Implement a formal comprehensive programme for
continuing director development
- Foundation programme
- Practice oriented series
- Residential programme
- Directors’ round table
- Directors’ update service
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Foundation Programme
- Update of current company directors course
- Introduction of Q & A panel
- New 1 day course on key essentials for new directors
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Practice Oriented Series
- Half day/full day practical workshops designed to improve
directors’ implementation skills and effectiveness
- Emphasis on process instead of structure
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Residential Programmes
- 3 to 5 day programmes conducted semi-annually
- Emphasis on sharing, case studies, net working
- Regional participation
- 1st programme in July 04 conducted jointly with corporate
governance and financial reporting centre, NUS
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Directors’ Round Table
- Once per quarter
- Forum for discussion on issues affecting directors
- Exclusive to SID members and invited guests
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
- Directors’ Update Service
- Designed to provide directors with timely updates on
changes/proposed changes in legislation affecting directors
and developments in global best practices in corporate
governance
- Annual board of directors’ survey
Policy Dialogue on Corporate
Governance in China
Shanghai, China
25 – 26 February 2004
Key Thrusts – 2004 / 2005
- Introduce criteria and procedure for director assessment
- Introduce as part of best practice for all new directors of
listed companies to attend training and for annual
disclosure by companies on director training
- Extend collaboratoin with existing and new partners,
including IoD UK
Policy Dialogue on Corporate
Governance in China
Thank you
Shanghai, China
25 – 26 February 2004