Governance on agenda for directors in UCD diploma

Corporate governance has moved out of the boardroom and the classroom and on to the front pages over the past number of years. High-profile problems in charitable and other non-profit institutions, along with the still-recent banking collapse and attendant economic crisis, have served as stark reminders of the importance of high standards of corporate governance not just in business life but for society as a whole.

Prof Niamh Brennan, programme director of the diploma in corporate governance at the UCD Michael Smurfit Graduate Business School, believes this notoriety is a positive development. "Last August saw some serious problems playing out in the Olympic Council of Ireland," she says. "And more recently we saw Glen [the Gay and Lesbian Equality Network] closing down as a result of corporate governance failings. I have to say that the media is doing a great job in highlighting how potentially fatal to organisations these failings can be. The OCI is probably a much better organisation as a result of what it went through."

It has also translated into greater interest in the diploma in corporate governance. “The programme commenced in 2004-2005 and we are now in our 13th year,” says Prof Brennan. “Student numbers have increased significantly over the past few years. We have 37 students on the course this year, up from 32 last year. This is a reflection of both the growing interest in the topic and the fact that training budgets are now coming back after the crash.”

The programme is aimed at directors, potential directors and those interested in governance. It provides participants with the knowledge and skills necessary to carry out the increasingly onerous duties and responsibilities of company directors. Diploma holders are able to show that they have pursued a course of study that gives them the technical competence to carry out the tasks required of directors.

Part-time course

The part-time course is organised to facilitate busy executives and directors, with classes taking place on Mondays and Tuesdays from 4.30pm to 7.30pm. Participants gain both a broad understanding and overview of corporate governance as well as expertise in key aspects such as directors’ responsibilities, the role of boards, the selection of non-executive directors, executive remuneration, annual reports and financial statements, audit committees, risk management and business strategy.

“We also go into the softer side,” she adds. “We look at the behaviours and interpersonal skills required for boards to work well. There is also a module on improving business performance.”

It’s not all chalk and talk, however, and the students themselves make a significant contribution to the programme. “These are mature, very senior people,” she says. “They are very experienced and bring great expertise with them. People learn as much from each other as they do from the course. At least half of the learning on the programme is from each other. Our approach is quite different and we try to ensure that the students benefit from the expertise of the other participants. Each semester we do one night away in a hotel where we do stuff around corporate governance but it’s different to a classroom setting. It allows the class members to get to know each other better. Firm friendships are made during the programme.”

A recent innovation on the programme has been the introduction of the 30 per cent club scholarship which offers full tuition fees to one female participant each year. The 30 per cent club is a group of business leaders committed to achieving better gender balance at all levels of organisations. The group aims to reach a 30 per cent female representation on Irish boards and at executive management level by 2020.

"The first recipient was Stephanie Manahan, chief executive of the Central Remedial Clinic. She has done a fantastic job of completely transforming that organisation into an example of high standards of governance This year's scholar is Katherine Licken, secretary-general of the Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs. That highlights the importance of corporate governance in the State sector."

Pointing to the overall importance of corporate governance to society, Prof Brennan says most people should have at least a basic understanding of the concept. "You don't have to go to UCD to get a diploma in corporate governance to understand the difference between right and wrong," she says. "People should just ask themselves if they would be comfortable reading about something on the front page of The Irish Times to know if what their organisation is doing is right or wrong. The role of the board is to protect the company and not the shareholders. There is a subtle difference and it needs to be understood.

“You have to remember that corporate governance is about corporations and most of them are limited-liability companies,” she adds. “They have been granted the gift of limited liability to encourage them to take risks which, if they work out, will be good for the company, its employees and shareholders, and for the economy and society. The board’s key job is to manage risk. If it manages risk well, the chances of a company going out of business will be reduced. Of course, things don’t always work out as planned but that’s part of capitalism.”

To learn more about this year’s programme, which starts in September, go to smurfitschool.ie