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Induction and professional development - Coggle Diagram
Induction and professional development
The Code used to provide that all directors should receive induction on joining the board and should regularly update and refresh their skills and knowledge
The FRC guidance states that the chair should ensure that
All directors receive a full, formal and tailored induction on joining the board
All directors continually update their skills, knowledge and familiriatiy with the company to fulfil their role both on the board and committees
NEDs should on appointment, devote time to a comprehensive, formal and tailored induction that extend beyond the boardroom. Initatives such as partnering a NED with an executive board memeber may speed up the process of them acquiring an understanding of the main areas of business activity, especially areas involving significant risk. They should expect to visit operations and talk with managers and non-managerial members of the workforce. A NED should use these conversations to better understand the culture of the organisation and the way things are done in practice and to gain insight into the experience and concerns of the workforce
The Code used to provide that as part of their induction process, directors should avail themselves of opportunities to meet major shareholders.
ICSA guidance suggests that
The way an induction programme is delivered will be an essential factor in its success
It is not possible to design a single programme to suit all circumstances and that the programme should therefore be tailored to the needs of the specific individual
The time taken to complete an induction will depend on the organisation, its size and complexity but may take 12 months in order to cover a full board cycle
ICSA guidance states that the aim of the induction process should be to
Buid an understanding of the nature of the company, its business and the markets in which it operates
Build a link with the company's people
Build an understanding of the company's main relationships
Ensure an understanding of the role of a director and the framework within which the board operates
ICSA guidance suggests that the company secretary should
Consult the new director before devising the induction programme
Prioritise and schedule various elements of the programme over a reasonable period to avoid overloading he new director
Vary the delivery of information and limit the amount of data presented just as reading material
Organise site visits and make use of meetings with executives, advisers and stakeholders to cover off certain elements and consider using external training courses
Plan the induction programme with reference to the directors' training and development programme as one should transition smoothly into the other
Review the induction programme with the director mid way through and at the end of the process
Professional development
The Chair should ensure that all directors continually update their skills, knowledge and familiriaity with the company to fufil their role both on the board and committees
Under the direction of the chair, the CS' responsibilities include arranging board training and assisting with professional development as required
It is liikely that training needs will be one of the factors considered in the performance evaluation process
The 2018 Code provides that the chair should act on the results of any board evaluation and that each director should engage with the process and take appropriate action when development needs have been identified
The FRC Guidance suggests that the outcomes from the board evaluation should be shared with and discussed by the board, should be fed back into the board's work on composition, the design of induction and development programmes
With regard to NEDs, the FRC guidance states that they should devote time to developing and refreshing their knowledge and skills to ensure that they continue to make a positive contribution to the board and generate th respect of other directors
The CS will be involved in identifying and fulfilling board training needs. Many CS try to schedule ad hoc training sessions on important new developments before board meetings commence. Board 'away days' may also provide opportunities for short training sessions
CS themselves may be called upon to make any of these presentations but should also consider inviting the company's professional advisers or a professional trainer to perform these tasks
More extensive in house or external training courses may sometimes be required for particular individuals
Online training, webinars and podcasts should be considered as potential training options
Encouraging senior executives to take up a non executive post
Taking up an outside position as a NED is considered by some to be an essential part of the professional development of an executive director
Taking up a NED on a non-competitor board enables executive directors to experience first hand what it is like to be on the other side of the executive/NED divide.
This should help them understand the concerns of NEDs and make it more likely that they will cater for them
There is a danger that an executive director serving as a non-executive at another company may simply moderate their behaviour in that role to match what they would expect from their own NEDs and may not offer sufificnetly robust challenge