No matter how experienced a director, there is always, by definition, additional knowledge and skills that can be gained.
Continuous learning is alive and well in the boardroom but there is a basic curriculum that applies to directing a company too.
The problem is that this curriculum is seldom, if ever, written down – at least not on a single page.
In contrast there are many tomes that purport to outline the breadth of a director’s duties, with the one that sits above my desk at least three inches thick.
So here is a shot at a short-form boardroom curriculum – listed from A to Z.
Ask yourself whether the curriculum below ticks all the boxes – or else leaves key gaps that could be detrimental to the health of your company?
A is for annual general meetings and annual reporting, auditing, the Australian Securities Exchange and the Australian Securities and Investments Commission;
B is for boardroom committees but also for boardroom coups and business culture;
C is for conflicts of interest – constitutions, charters and circular resolutions;
D is for disclosure – of the continuous variety, for decision-making, for dividends and for debt;
E is for ethics, for eureka moments and also for extraordinary general meetings;
F is for financial statements, the foreign exchange market, for factions, friction and also for fundamentals;
G is for governance, for group-think, for going concern, gearing and for gender balance;
H is for half-year reporting, holding companies and human capital;
I is for independence, for in-specie distributions, for (directors and officers) insurance and for initial public offerings;
J is for jurisdiction, for journalists and for just-in-time;
K is for key performance indicators – but not for too many of them!;
L is for leadership, for legislation, for legal liability and for liquidation value;
M is for meetings, mission, for management, for mergers and acquisitions and for media relations;
N is for non-executive directors, for net asset value for nomination committees and for non-governmental organisations;
O is for options – of both the financial and strategic (real) variety;
P is for personal liability, for prospectuses, performance, for project finance and for polls;
Q is for quarterlies, quorums, quartiles and queries;
R is for resolutions, responsibility, regulation, reasonableness, remuneration and risk;
S is for strategy, succinctness, solvency, security, for share price and shareholders’ funds;
T is for takeovers, taxation, transparency, for true and fair – and ultimately for termination;
U is for understanding, underwriting, unsecured and for unethical;
V is for value (and for values), for vision, voting rights and also for vested interests;
W is for wisdom, wealth and work-life balance;
X is for dividends and rights (get it?);
Y is for yes votes and also for yield; and
Z is for zero-sum game.
All that lot makes for a very full curriculum already – but one aspect of directing requires constant vigilance for any gaps that may carry risk.
So the final question to you is a simple one. Where are those gaps?
I’ll open the bidding on that front with the suggestion that “a sense of humour” might come in handy in the boardroom on a few occasions too.
Good hunting.
Allan Trench is a Professor at Curtin Graduate School of Business and Professor (Value & Risk) at the Centre for Exploration Targeting, University of Western Australia, a non-executive director of several resource sector companies – and the Perth representative for CRU Strategies, a division of independent metals and mining advisory CRU group (allan.trench@crugroup.com).