How the AICD Company Directors Course Gets You Boardroom-ready

Hungry for a seat in the boardroom? Welcome to director school. Narelle Hooper signs up to find out exactly what it takes.

What to do? The directors of the fast-growing online sports company are deep in a special board meeting, with pressing matters to resolve. A strategic acquisition opportunity, a bigger board to accommodate the target’s founder, decisions on funding that would impact its bank debt covenants and warning signs of earnings being behind forecast are all in the mix. An alarming red flag looms over the agenda – a whistleblower report on a complaint of bullying against the CEO. It’s late on a Friday afternoon and matters come to a head as 23 wannabe directors wrestle with the complexities and priorities, using tools and knowledge crammed into their heads during a five-day intensive Company Directors Course (CDC) with the Australian Institute of Company Directors (AICD). It starts to feel real.

I’m pinching myself, hoping my judgement is sound but equally keen to learn the views of my newfound boardroom buddies. With 15 years as a non-executive director, currently at The Ethics Centre, and five years as the former editor-in-chief of the AICD’s member magazine, Company Director, I know a thing or two about corporate governance. But heeding friends’ advice, I finally stopped putting off my longtime goal to do the CDC, cleared my diary and signed up.

As director education goes, the CDC is famous. It’s not an inexpensive proposition, with in-person courses starting at $9300 for AICD members (membership is $660 a year) but for busy people, the time investment is an equally important consideration.

There are several ways to do the course: face-to-face or online, fast or slow, in a CBD location or as a residential regional experience. And which you choose depends on your learning and social preferences, time and budget. I’ve opted for the face-to-face course, which is offered across a five-week block or as a five-day intensive, the option I elect to go with. While I like the idea of spreading my learning over time to digest the complexities, it simply won’t work with my diary. Plus, there’s an energy in the shared experience of mainlining director education in just under a week.

The CDC comes with a warning: “Course materials are extensive and will require dedicated time, focus and effort to complete.” It’s recommended that you allocate six to eight hours a week before the class for each of the five core themes: Governance and the Practice of Directorship; The Legal Environment; Financial Literacy and Performance; Risk and Strategy; and Achieving Board Effectiveness. Six weeks out from the course, two fat black binders (a total of about 1100 pages, excluding appendices) land with a thud. It’s an authoritative combination of theory, regulation, practice and case studies. The content’s physical weight can be daunting in the digital age but there are also e-copies on the course’s learning portal and videos, quizzes and exam and assignment examples to support your study.

The course is a test of your capacity to grasp detail, synthesise knowledge and apply acumen to fast-paced decision-making. Take it from me, a long-time last-minute crammer: you need to do the pre-reading before you turn up for class. Don’t try to wing it. If you don’t do the reading, you’ll struggle. It’s not that the material is dull; it’s the breadth and depth of the detail that you need to load into your director’s memory bank. Forewarned, I find that being disciplined in allocating reading time, highlighting and note-taking then following up with online quizzes helped me to absorb the information better. Asking AI-powered tools Perplexity.ai and Claude.ai was a great way to test my knowledge when I was unsure.

The CDC is also a test of your time management. When you finish the classes, you then have 90 days to complete three assessment elements – a 3000-word case study assignment, an exam and a quiz. To pass, you need to score 65 per cent in each. Assessment is optional but reinforces your learning – and earns you the “GAICD” (graduate of the AICD) you so often see on board director CVs. You get further chances to resubmit if you don’t pass but after the 90 days, you have to pay to extend.

As we gather on a Monday morning in Sydney, our facilitator, Simon Neaverson, jokes that “we spend the first two days scaring you… to ensure you really understand the challenges of modern governance, then the last three days we discuss the solutions.” It’s not an idle threat. “Governance is really about stewardship,” he says, “not about you.” The desire to be a director is driven by a cocktail of motivations – service, money, power, reputation, the challenge, career advancement and greater control over your time and life. “Everything in the course is about what society expects.”

Sound governance is a crucial foundation for the enduring success of an organisation. We’re told that the ultimate job of a board is about resource allocation and outcomes. Being a company director brings with it onerous fiduciary and legal duties and obligations that are in keeping with its privileged position. There’s the requirement to act with care, diligence and in the interests of the company, to prevent insolvent trading, maintain proper books and records, and transparently manage conflicts of interest. If you breach these duties you could be personally liable and it could be criminal and civil penalties or disqualification as a director. We’re reminded of directors and officers who’ve had to endure the excruciating glare of the media and grillings at public enquiries or in the courts, all of which can wreck your reputation.

Well-known cases that identify the principles that directors must be familiar with include James Hardie, Centro Properties Group and the ASIC’s Federal Court proceedings against current and former directors and officers of the Star Entertainment Group. “People come out [of the CDC] realising how onerous the legal duties are, that your house is potentially on the line,” reflects a colleague. “Some decide that being a non-executive director is not for them.”

Many of the course participants worry about achieving an adequate grasp of board legalities and financials. Yes, you do become overly friendly with the Corporations Act 2001 and an array of handy accounting ratios. But equally important is understanding that you have to think like a director, not like an executive. Essentially it’s the difference between oversight and execution.

It’s the board’s responsibility to oversee the organisation’s strategic direction, governance and risk management, ensure that it complies with legal and regulatory requirements, hire and fire the CEO and monitor performance. Management’s job is operational execution, to implement strategies, manage resources and execute plans to achieve organisational goals. At the AICD’s annual Governance Summit in March, John M. Green, the newly appointed chair of PwC Australia (pictured above), described the role of the board as sitting in the backseat of a car, pointing out obstacles and danger zones to the CEO, who is the one driving the car.

As a non-executive director, your most powerful tool is your ability to question. There’s also a fine dance around accountability and effective relationships without getting too cosy. In an interview with Company Director magazine, former NAB CEO Ross McEwan (pictured below), who became the chair of BHP in March, said that the ideal board provides a mix of challenge and support without being confrontational. “They ask the tough questions but they’ll also be there when there are tough things going on, in real support.”

Former NAB CEO and current chair of BHP, Ross McEwan

Over the course’s five days we’re immersed in structured learning – first theory then applying it through case studies, analysis, group discussions and simulations. We learn about our risk profiles, the challenges of boardroom behaviours and decision-making under pressure.

The gold in this are my fellow conspirators, the facilitators and sharing experiences under the Chatham House Rule. My group of would-be directors includes an architect whose award-winning home featured on Grand Designs Australia, a St John Ambulance boss, a bank CFO, a property group COO (whose notes helped us), a school principal, a global defence veteran, a world-leading ophthalmic surgeon, a couple of startup founders, a poet and someone who’d swum the English Channel. We bond quickly, share information and plan to keep in touch on a WhatsApp group. Executives often come to director school with well-honed sector expertise but this group shows the value of a breadth of experience. As we become familiar with each other’s capabilities, we develop a shared interest in seeing each other progress.

AICD is sometimes described as catering to the big end of town, as focused on ASX directors. The reality is its members come from across the Australian business and community spectrum and from diverse backgrounds. Membership of the AICD is roughly 60-40 male-female and our class ratio is about the same, with 14 men and nine women, aged from their late 30s to 60s and from different racial backgrounds and sectors.

Once you’ve made it through, it’s over to you. Facilitator Melinda Muth says that it’s about being proactive and finding the organisation where you can add real value. Sure, it’s flattering to be asked to join a board but “do your due diligence”, she warns. “You need to know what you’re getting yourself into before you step into the arena.” More boards are seeing the benefit in recruiting directors with diverse backgrounds and a greater number of these roles are being advertised. A useful place to start is getting involved in your sector or profession at the local level or in a cause you care about.

The GAICD post nom, which designates a graduate of the AICD, is a respected and beneficial credential but it’s not a guaranteed ticket on the Boardroom Express.