Strengthening your membership

  • Date:01 Nov 2012
  • Type:Company Director Magazine
John H C Colvin explains how Company Directors is responding to the increasing stakeholder expectations of directors and how membership requirements are changing.


Our members who follow the news will no doubt agree that individual directors and boards are in the spotlight more than ever before, with close scrutiny and high expectations of governance performance. In this context, we recently finalised and have started to implement our new five-year strategy that clearly sets out our role and reason for being.

We are here to provide leadership on director issues and promote excellence in governance to achieve a positive effect for the economy and society. Our aim is to influence the creation of world-leading governance laws and practices. This will assist in making directors individually more valuable and help boards reach higher levels of performance.

In the first of many initiatives of our new strategy, I am pleased to announce an important change to the requirements of membership.

But before I do, it is important to understand the "why" and the work done leading up to its introduction.

Public commentary on directors indicates shareholders, members and the broader community expect all directors to have the requisite skills, knowledge and understanding to fulfil their duties and govern their organisations effectively. These expectations of strong governance extend across all organisations, including small private businesses, not-for-profits, publicly listed companies and public sector bodies.

Stakeholder expectations have only been increasing since the global financial crisis. As the European debt crisis continues to cause economic uncertainty, some shareholders are venting their frustrations by targeting boards. And, legislative, regulatory and other changes affecting directors are made at break-neck speed. Just keeping up is difficult for us all.

Recognising these expectation and perception challenges, we seek to support our members through our principal activities, which are founded on the benefits of life-long learning, professional development and recognised post-nominals (MAICD, GAICD and FAICD).

Beyond post-nominals, the ability of our members to differentiate themselves from their peers and to demonstrate their professionalism and commitment to excellence in governance – particularly to those who scrutinise performance in the face of perceived failures – has been somewhat limited in the past.

We know members join us because of the credibility afforded through membership and many seek the means to establish and differentiate their professional standing. We also know members are better informed, but again, this has been difficult to prove comprehensively. To address this, we have been laying the groundwork to provide members with greater means to demonstrate their commitment and dedication to continuous improvement and their currency as directors.

Some newer members, and those outside our membership, may be unaware that our Fellows (FAICD) have been required to undertake an earlier form of director development, known as Continuous Professional Development (CPD), to maintain the right to use this post-nominal and to renew their membership in this class.

In November 2011, our board decided to extend our compulsory professional development requirement beyond Fellows to include GAICDs and MAICDs from January 2013. This decision was based on the goal of differentiating our members’ capabilities and to build confidence in their professional standing and integrity.

Since then, a strategic project group has been working hard, in consultation with expert peers, to plan the detail for the extension of a formal Director Professional Development system – or DPD, as it will be known. Throughout this planning process, the system has been tested for the appropriate level of strength and long-run durability.

As our members progressively join our DPD system and as we communicate this to our external stakeholders, we will be highlighting the importance of this continuing commitment to learning and the benefits of your membership.

Encouraging an improvement in the quality of directors, boards and governance practices through DPD will assist in enhancing the reputation of directors in the community, which, in turn, strengthens the platform from which we can advocate for legislative and regulatory reform to support positive change to the operating environment for directors.

We believe the investment of members in DPD demonstrates their individual professional commitment. The governance landscape is continually evolving and changing the demands on directors. Completing your DPD requirements will help you to stay up to date with your director knowledge and your duties and responsibilities, enabling you to be more effective in performing in your role. It may also differentiate you from other candidates when seeking board or other positions.

Our team has received comprehensive training and we welcome your feedback and questions on the new system. It represents an evolutionary, yet significant, change for us and its success and benefits depend on the understanding and support of all members. For more details, see p60 and visit our website at: www.companydirectors.com.au/cd/dpd.

John H C Colvin FAICD
CEO and managing director, 
Australian Institute of 
Company Directors