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Home arrow Economics arrow Boards of directors of state-owned enterprises : an overview of national practices.

Board training and induction

The SOE Guidelines recommend engaging in human capital building among SOE board members to inform them of their responsibilities and liabilities. How much and what kind depends on the company and context. In all countries board induction is provided to new directors, in some cases mandated (and even arranged) by the ownership function, in other cases organised informally by the SOEs. Education and continuous training of board members is considered good practice in countries whose SOE boards contain mostly public officials. Countries that have commercialised SOEs and professionalised their boards mostly nominate directors who are in little need of further training. Where training is offered it is mostly provided "off the shelf" by professional bodies such as institutes of directors and often not materially different from what is found in private enterprises.

nce a board of directors is in place, in many countries it is considered good practice to provide two specific kinds of human-capital building: i) board induction; and ii) continued training/professional development. Annotations to the SOE Guidelines suggest that training should be required, at a minimum, in order to inform SOE board members of their responsibilities and liabilities. This is essentially a limited form of induction, and indeed the need to provide new directors with an introduction is commonly acknowledged.

SOE Guidelines, Annotations to Guideline VI.A on training and induction

Annotations to Guideline VI.A: Training should be required in order to inform SOE board members of their responsibilities and liabilities.

As for actual training, in a number of economies there is apparently limited need. As discussed in previous chapters, the rules and procedures for board nomination are such that persons with proven qualifications and track records are recruited. For this reason, board members in many countries tend to attribute little significance to training aside from the induction programmes. However, where civil servants, public figures or employee representatives are asked to sit on boards, these persons might not be recruited specifically due to their corporate experience. Thus the assistance provided further to the appointment of new board members can be seen as useful.

In some economies the use of board training and induction goes further with the aim of developing already well-qualified SOE boards' competencies. Professional bodies and “centers of excellence” (such as institutes of directors) play a role in offering adequate and specific training to SOE boards. Such training covers their roles and responsibilities, as well as specific training on relevant technical aspects, related for example to financial and non-financial disclosure.

The remainder of this chapter examines country practices with regard to induction for new board members, and whether specific training is common to encourage on-going professional development. It finally examines the role of “off the shelf” training programmes and their role in supplying training to SOE board nominees.

 
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