Director training is a mandatory requirement in certain countries. In other countries it is expected that directors attend regular training. Many organisations ask themselves what the training and development importance is and can director training lead to enhanced business excellence and increased profits? Is training and development important and if so, what level of investment should organisations devote to developing their leaders, directors and senior executives? In some countries, regulation requires businesses to devote a percentage of annual revenue towards continued learning and training of directors and employees. Internationally we see corporate governance codes being revised to focus on the importance of entrepreneurial leadership and the induction and continued development of directors through director training and performance reviews through board and director evaluations.
If we look at the banking and financial services industries, they require directors to possess a certain level of knowledge and experience. In this highly regulated industry, the listing authority and central bank require that directors are authorised and maintain a high standard of knowledge and integrity. In other industries we do not see the same level of rigor and it is only certain members of the audit committee that are required to possess a financial background and recent financial experience and independence.
The use of systematic director training and development should form part of the overall human resource strategy for any organisation and shouldn’t just be considered for listed companies or large private companies.