CPD for corporate governance: why is it important?
May 22, 2024CPD for corporate governance is the other key ingredient in staying on top of your leadership game.
As with many other professional fields, it’s one thing to become an expert and another to remain an expert throughout your career. Make no mistake: this doesn’t just happen without your effort and input.
Quick recap: what do we mean by CPD for corporate governance?
CPD means continual professional development and, realistically, is vital to almost every career path, whether you’re aware it’s happening or not.
In some career paths with tremendous responsibility, however, structured, scheduled and measured CPD is rapidly becoming the norm, if not a fundamental requirement already.
Corporate governance is one of these career paths. Pursuing CPD in this field means accessing the right insights to remain successful as a board director or similar corporate leader.
Here are the five main reasons why CPD for corporate governance is important
You need to adapt to regulatory changes.
Need, not should, or it would help. The thing about modern corporate governance is that it quickly gets technical within an ocean of legal responsibility. If you don’t live up to those legal responsibilities, you may be liable up to the point where your career is seriously threatened.
That’s not meant to scare you, just to give you context. The good news is that proper CPD ensures you stay on top of the regulatory environment that you learned about in your initial governance training.
You stay informed on evolving laws, standards, and guidelines introduced regularly and remain confident about who to report to and what you should be telling them.
Crucially, you also learn how new rules impact your company’s operations. The local/national/international regulatory environment should always be a key factor in crafting company strategy, so proper CPD will give you the insight you need to oversee it properly.
Risk always evolves
Good board members should be able to understand risk, but the world of risk is dynamic. Even the best training programmes will only give you a time-based snapshot of the most important things to consider.
CPD helps corporate leaders understand and adapt to any changes in the world of risk. Take the pandemic as an example: it pushed digital pitfalls and cyber threats far further up in the list of priorities as the world moved online.
Understanding these aspects allows leaders to make informed decisions that mitigate risks and capitalise on new opportunities, driving the organisation’s growth and sustainability.
Your decision-making skills are enhanced
Board members are trusted more than most to make the most thought-out, effective decisions no matter what’s on the agenda. If they can’t do that, anyone could easily question their credentials.
The trouble is that effective decision-making depends significantly on having the most relevant expertise. This means you can’t rely on one training or mentoring programme you took ten, five, perhaps even two years ago. Maybe the information you gained then isn’t irrelevant yet, but there’s very likely more to it that you should update yourself on.
CPD programs often include training in strategic thinking, risk management, financial acumen, and ethical leadership fuelled by the latest examples and contexts. It’s just the ingredients you need to keep your skillset focused.
Your board benefits
The beauty of CPD is that it can be tailored to what you and your company need most, and one common issue is refresher training in areas like communication, conflict resolution, and team dynamics.
We often think we’ve been through every possible training session for this kind of thing, but working relationships is a vast area of study. As well as new techniques and insights, it’s also helpful to retrain your mind around issues you’ve simply forgotten over the years.
A board that engages in continual learning will more likely make itself a cohesive unit and a more effective governance organ. This is crucial for tackling complex issues and driving your business forward.
You build stakeholder trust
Not only is CPD becoming essential, investors and other stakeholders know it’s becoming essential.
Their perception of how your board embraces CPD could determine their confidence in your company. No investor or shareholder wants to hear that the board they’ve trusted simply doesn’t care about staying fresh and able. If they get ideas like this, it can lead to frustration, even panic.
Structured CPD – and a strategy around when board members should look for it – is a way to ensure no fears like this will ever surface. You want stakeholders to trust that there is never an issue with staying on top of your game.
Source: Corporate Governance Institute