Experts cool on director boot camp plan
Oct 14, 2009
Education ‘won’t make a bad person good’
The Conservative Party – the UK political party likely to take office next year - is considering a scheme for the rehabilitation of failed company directors, the Sunday Times reported this week. But governance experts state that, while such a scheme would serve to correct the genuinely uninformed, the real villains, or ‘rogue’ directors, would not respond to rehabilitation.
The newspaper likens the plans to speed awareness courses taken by drivers to avoid penalty points on their licenses. Peter Walker, executive chairman of Pielle Consulting Group, says this analogy ‘justifies the saying that all comparisons are odious’, though he supports the idea that training programs would be appropriate in some circumstances. ‘I vouch for the fact that the road safety training session works because you learn things about being a driver within the law you never learned in taking your test,’ he comments.
Peter Waine, director at recruitment firm Hanson Green, agrees that the practice of a very specific type of director could be reformed by training. ‘If it is a genuine case of over-promotion and he or she has a willingness to learn the tools of the trade, a scheme like this could work,’ he says.
Walker highlights that there seems to be ‘no infrastructure for directors of small or medium-sized enterprises in particular to obtain basic training in the role and responsibility of directors and their liabilities under company law.’ He recommends that education should not be instigated as standard punishment but as an essential prerequisite for qualification.
The newspaper also notes the low number of disqualifications for poor or rogue directors, however, an issue the scheme is unlikely to solve. It might even enable and encourage rouges to continue operating, offering little in the way of severe or long-term punishment.
Waine is merciless in judging that education ‘won’t make a bad person good.’ But he stresses that it is a minority issue among directors.
Though the dual nature of the problem has been identified, one point is relevant in all cases. ‘There should be a tightening up of approach,’ says Waine. ‘These are people happy to take the credit and financial benefit when things go well and they should take the rough with the smooth.’