High standards of corporate governance have probably never been more important than they are now. Failures have the potential to undermine confidence and trust in business generally, as well as in critical areas of the economy including the financial system. That highlights the need for company directors and senior directors to have the technical knowledge necessary to carry out their governance duties.
For almost two decades, the UCD Michael Smurfit Graduate School of Business has been imparting that knowledge and offering an in-depth exposure to all aspects of corporate governance.
“I started the programme in the 2004-05 academic year,” says the programme director, Prof Niamh Brennan. “It was the first Executive Development diploma in the Smurfit School. I had set up the Centre for Corporate Governance in 2002 offering short courses and in-house courses for directors and others interested in the area. I spent two years developing the accredited diploma programme.”
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Personal experience prompted her to establish the Centre for Corporate Governance. “I had taken on a number of non-executive directorships at the time – but what did I know about being a company director?” she recalls. “I realised there were a lot of other people in the same situation, and my motive was to provide training for them when there was no training in place.”
She is quick to point out that business failures or missteps needn’t necessarily imply low governance standards, explaining that the main aim of incorporation is to protect entrepreneurs in the event that things go wrong.
“Things can go wrong due to competitive forces or market shifts,” she notes. “It can also be due to an error of judgment. It’s not against the law to make an error of judgment. For example, in the UK, the government report on RBS following the banking crash did not find against anyone. It found errors of judgment, but no case of people setting out to do bad things.”
The students bring a wealth of experience into the class. We get a really interesting and broad mix of backgrounds, roles and sectors
— Prof Niamh Brennan, Michael Smurfit Graduate School of Business
What good corporate governance does is put in place checks and balances to ensure that things are done properly. “This applies especially to people at a senior level who have a lot of power. The risk is at the top of the organisation, not at the bottom. A petty cashier is audited several times a year, but the risk there is tiny. The risk is at the very top.”
A principle of good corporate governance is the distribution of power across more than one person. “The dominant CEO is now seen as a bad thing. The combination of the CEO and chair roles is a bad thing. That power should not be concentrated in one individual.”
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Governance starts at the top with the board and responsibilities of directors, and cascades down through the organisation into its day-to-day activities, she adds. “Having the structures and processes in place starts at the top. These structures and processes protect shareholders and other stakeholders and the long-term sustainability of the enterprise. The job of the non-executive director (’Ned’) is to exercise challenge. Sometimes they may be reluctant to do so, and there was a touch of that during the banking crisis. Some Neds might look back and think they should have exercised stronger challenge.”
The Diploma in Corporate Governance was established at a time when there were no other training providers in the sector. “I designed it on my own and over the years we have seen a lot of others coming into the market. I have ensured that it remains different from other programmes and is at the upper end and best in class.”
The programme covers both the technical aspects of corporate governance as well as the less formal side. “Students learn about the legal and regulatory aspects and the different codes that apply, including the stock exchange codes and so on,” she explains. “There are a lot of codes out there. They also learn about the softer side, the behavioural and psychological issues.
“What really makes it interesting is what students learn from each other,” she continues. “The students bring a wealth of experience into the class. We get a really interesting and broad mix of backgrounds, roles and sectors. We don’t set out to achieve that mix, but the course attracts it. That makes for a rich learning experience for everyone – both students and lecturers. Lectures are held on Monday and Tuesday evenings and there is a break for the students to get something to eat. That’s really important for networking and the conversations where knowledge exchange takes place.”
Now entering her final academic year as programme director, Prof Brennan looks forward to welcoming students to the next course, which begins in September. “Applications are open now and I expect to see another very interesting group of students on the programme.”
For more information or to apply, please contact Annabelle Phelan, client relationship manager, on annabelle.phelan@ucd.ie or 087-0985117.
Full details on the programme can be found at https://www.smurfitschool.ie/executivedevelopment/programmesforindividuals/diplomaincorporategovernance/