With the carnage created world wide by directors of banks and other companies, it is more than timely to reflect on them and how they achieve their overpaid positions - and their qualifications, if any, to be directors.
Although written from an Australian perspective, this piece "Self-examination of chaps is no standard" in The Age newspaper is timely and applicable to directors everywhere in the world:
"At the end of a recent rowdy annual meeting of shareholders for an ASX-listed company, an elderly woman turned to me and said: "This board of directors is like a group of badly behaved teenage boys in their mid-60s."
She was understandably perplexed after witnessing a dismal attempt to defend a contentious remuneration report, and it brought home to me two critical characteristics that have bypassed the world of company directors: compulsory training in professional standards; and a licence to operate.
When visiting a lawyer, medical practitioner, architect or accountant, the expectation is that the person sitting opposite is thoroughly trained and has satisfied the full and continuing education requirements of an esteemed professional body. Failure to achieve the required standard will result in denial of entry to the field of professional practice, and failing to maintain the standard will result in disqualification.
Company directorships are one of the few noteworthy areas of professional practice for which no formal barrier to entry exists.
A significant informal barrier to entry exists, however, and it operates to exclude all but an intimate few. A scene from a Yes Minister television episode illustrates this. The minister asks a top British bank chairman how he was appointed. "In my walk of life, chaps look after chaps," was the reply."
Although written from an Australian perspective, this piece "Self-examination of chaps is no standard" in The Age newspaper is timely and applicable to directors everywhere in the world:
"At the end of a recent rowdy annual meeting of shareholders for an ASX-listed company, an elderly woman turned to me and said: "This board of directors is like a group of badly behaved teenage boys in their mid-60s."
She was understandably perplexed after witnessing a dismal attempt to defend a contentious remuneration report, and it brought home to me two critical characteristics that have bypassed the world of company directors: compulsory training in professional standards; and a licence to operate.
When visiting a lawyer, medical practitioner, architect or accountant, the expectation is that the person sitting opposite is thoroughly trained and has satisfied the full and continuing education requirements of an esteemed professional body. Failure to achieve the required standard will result in denial of entry to the field of professional practice, and failing to maintain the standard will result in disqualification.
Company directorships are one of the few noteworthy areas of professional practice for which no formal barrier to entry exists.
A significant informal barrier to entry exists, however, and it operates to exclude all but an intimate few. A scene from a Yes Minister television episode illustrates this. The minister asks a top British bank chairman how he was appointed. "In my walk of life, chaps look after chaps," was the reply."
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