University launches corp governance course

UNIVERSITY LAUNCHES CORPORATE GOVERNANCE COURSE

New Zealand company directors need to do more to improve their standards of corporate governance, says a leading academic and experienced company director.

Wayne Cartwright, Professor of Strategic Management at The University of Auckland, is doing his bit by teaching a two-day course on the topic, aimed at senior managers.

The course, to be held at the University’s Business School this Wednesday and Thursday, will cover the basics of corporate governance, underlying ethical issues, the role of independent directors and the relationships between directors and management.

Corporate governance has been a hot topic since the Enron and WorldCom accounting scandals in the US and the failure of Australian-based insurer HIH and telecommunications company One.Tel.

“My assessment is that all is not particularly well in New Zealand, but corporate governance here is better than in the United States,” says Professor Cartwright.

One of the reasons for this is the healthy representation of independent directors on local boards.

Professor Cartwright, who has been an independent director of several companies, says independent directors bring a welcome level of objectivity to boards, but they need to do more to make their presence felt.

“The fact they’re independent often means they’re not as well informed about the business as are executive directors. Those who are better informed are generally those who wield the most power around the board table.

“Most independent directors spend two to three hours meeting once a month and just a few hours reading board papers beforehand.

“That’s just not enough time to get to grips with a business.”

New Zealand directors also tend to be appointed from a relatively small talent pool, dominated by individuals with similar backgrounds in accounting, finance and law.

Directors with technology, marketing and human resources backgrounds are less common, and this lessens the diversity of opinion around the board table.

Professor Cartwright says directors from more traditional backgrounds are more prudential and less likely to look to the future, to assess the impact of change on their companies and advise management how to respond strategically.

Another issue the course will address is the increasing tensions between the roles of directors and executives.

Responsible corporate governance requires directors to engage fully with strategic management issues. Their challenge is to do this without undermining senior management; conversely senior managers need to learn how to lead decisively without pre-empting directors. Next week’s course on corporate governance is one of more than 560 “short courses” the Business School has offered over the past six years to more than 10,000 participants. The courses are an integral part of the Business School’s philosophy of “Lifetime Learning” and attract a range of mature business practitioners. Details of the corporate governance course can be found at the website: http://www.shortcourses.

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