New Trends in Director Education

More companies say their board has received training on ESG (80%) than any other topic in 2022, according to a special report by Corporate Secretary and Diligent. The study interviewed over 200 General Counsels and other governance professionals globally and found that about 60% of companies now seek outside counsel on ESG matters, along with education from colleagues in Legal, Finance and HR.

Other findings include:

• Only 37% of US boards receive counsel from an internal sustainability team, a practice which is much more common in Europe (49%).
  
  
• After ESG (80%), the most common topics on which the board received training were corporate governance (77%), cyber-security (73%), and compliance/regulations (67%). Large company boards were more likely to receive training than small ones, which seems like a missed opportunity as small company directors may have fewer opportunities for education overall.
  
  
• A number of director training formats were mentioned in the survey. Although live presentations (either in-person or virtually) were strongly preferred, about 29% of companies said they use online self-guided courses and 43% use online educational resources.
  
  
  1. At very large companies, adaptive learning technology is growing in popularity, with 10% using it to deliver education or information. Large companies were also more likely to use videos (24%) and real-life examples (29%).
     
     
• About half of companies assess on an ongoing basis whether director have the training they need; an annual assessment is common, but some companies do so more frequently.
  
  
• Perhaps unsurprisingly, 96% of governance teams claim their boards have the information they need to fulfill duties effectively. Unfortunately, this does not align with the views of directors themselves. For example, in a recent Corporate Board Member study (see related story) more than a third of directors said they had only a basic understanding of climate risks, and according to PwC (see related story) only 11% even think it’s important.

Additional ideas for director education included more short training sessions on specific topics like cybersecurity and ESG, “objective” training not delivered by “lawyers and consultants trying to sell services,” and ingraining training into the board calendar. Several companies noted they would like to provide a more customized educational experience by determining the information individual board members need, and many wanted more external presentations to the board. For more ideas, see our Guide to Director Onboarding here.