OMERS, CMA Canada back Directors College

(August 5, 2003) The Directors College received a shot in the arm today, as three of the top advocates for improved corporate governance announced their support for the education initiative.

The Ontario Municipal Employees Retirement System (OMERS), The Society of Management Accountants of Canada (CMA Canada) and the Canadian Coalition for Good Governance have all thrown their weight behind the college.

“The Directors College should contribute significantly to the reinforcement of the educational background of board members, something we strongly support,” said Dale Richmond, president and CEO of OMERS.

Aside from nuts and bolts issues of risk assessment and performance measurement, the program will focus on “the softer side” of being a director, including courses on the interplay between a company’s board and the management team, as well as the group dynamics of the board itself.

“From the management accounting perspective, these elements are critical to enhancing the skills of directors and ensuring corporate accountability. It is very exciting for us to be involved in getting this initiative off the ground,” said Bob Dye, president and CEO of CMA Canada.

Board independence has been a component of both Canadian and U.S. regulatory reforms in the wake of high-profile corporate meltdowns like Enron and MCI WorldCom. The Sarbanes-Oxley Act in the U.S. included a call for board members to be “financially literate” — a stipulation that was echoed in Canadian reforms.

The aim of the Directors College is to ensure that members of a corporation’s board understand the information presented to them by management, rather than just signing off on it. Corporate ethics and board accountability are also components of the college’s curriculum.

When directors understand their role as a watchdog, rather than a rubberstamp, they should be more vigilant toward accounting practices. Since trust is such an important issue in the financial markets, it is hoped that this added accountability will improve investor confidence.

Proponents of the college point out its independence from the existing community of directors, which the college says makes it “free to be independent-minded, provocative and to bring fresh perspectives to bear.”

The program is comprised of five sessions which last two days each. The inaugural session will be held on November 13, at The Niagara Institute, 526 Regent St., Niagara-on-the-Lake, Ontario. For more information about the Directors College, visit www.thedirectorscollege.com.

What do you think? Will the Directors College improve corporate governance? Can better directors be made in a 10-day college? Share your thoughts or ideas with your peers in the Talvest Town Hall on Advisor.ca.

Filed by Steven Lamb, Advisor.ca, slamb@advisor.ca