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

Singapore Institute of Directors

-

Shanghai, China
25 26 February
2004

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

The Need For Sound Corporate

Governance

Shanghai, China
25 26 February
2004

- 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 of
directors central to board effectiveness

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

Features of an Effective Board

Shanghai, China
25 26 February
2004

- 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

- Have a comprehensive
induction programme
- Have a programme of
development for directors

Shanghai, China

and

formal

continuing

25 26 February
2004

director

professional

- Have formal board performance evaluation and

individual director appraisal
- Have well defined plans and processes for board
succession

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 directors duties,
and how he or she can be effective in the boardroom and
yet remain independent. The Chairmans 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