A View From INSEAD
INSEAD Certificate in Corporate Governance
Ludo Van Der Heyden
INSEAD Chaired Professor in Corporate Governance
Emeritus Professor of Technology and Operations Management
Ludo Van Der Heyden, co-Director of the International Directors Programme explains the thinking behind INSEAD's international qualification for company directors - the INSEAD Certificate in Corporate Governance.
Please visit our International Directors Programme webpage to find out more about our innovative programme and certificate for board members.
How does the INSEAD Certificate in Corporate Governance differ from other director qualifications?
Most comparable certificates are provided by national professional associations. As a result, they focus a great deal on compliance with national rules. But governance, from our viewpoint, is as much spirit as procedure. So we take compliance as a given and focus instead on effectiveness and excellence. In addition INSEAD is one of the world’s great business schools, so our qualification carries an academic weight and provides a distinct viewpoint from that provided by national governance associations. And of course, the Certificate benefits from the school’s long tradition of international education and research into Corporate Governance, which culminated in the creation of the INSEAD Corporate Governance Initiative in 2010.
Do you think that one day all directors will need a qualification to practise?
I think that the world is going in this direction. Luxembourg will probably be the first European country to introduce certification by law, but most countries in Europe are talking about it. When you reflect on it, that’s logical. Lawyers need to have degrees and professional qualifications. Medical doctors also need to be qualified for their life-or-death work. Being a company director is an equally serious business. Board members carry the responsibility for the legal entity that is the corporation – and sometimes thousands or even millions of people (when you consider product safety, environmental hazards, large-scale fraud and more). They carry out “corporate surgery” by removing CEOs, downsizing, or modifying corporate strategy and structures. So yes, they should be qualified, no question, and certification is one step in this direction.
Can you really have one qualification for directors in different countries and very different board jurisdictions?
Absolutely. It’s not just possible but important. You see, most boards – even of international companies – are not sufficiently diverse to generate new ideas for strategy or to challenge the status quo. Diversity offers checks and balances, which is why the notion is “in” with boards these days. The recent “crisis” may have been caused by greed, but it was allowed by poor governance, which failed to keep the greed in check. Monopolies of thinking – let’s call them ideologies – are dangerous and actually destroy value, Ideology does not suffer governance – it limits, counters and refutes it. That is why governance is a process and not a set of rules or a rigid framework. In short, we offer new perspectives that directors might not otherwise be exposed to.
Can you give a concrete example of this?
Sure. By coming on our programme and being exposed to members of European two-tier boards, certain UK and US participants have come to realise the extent to which their own single-tier boards are at risk of being dominated by the executive perspective. I think it has been a big surprise for them. One participant even resigned from his board, when he compared his recent experience with the concept of governance discussed in class.
Why did you introduce the INSEAD Certificate in Corporate Governance? And what does it add to simply doing the International Directors Programme?
It’s a matter of quality assurance. Doing the programme may contribute to demonstrating the skills of board membership. But of course, it’s not sufficient to guarantee these skills in practice. The Certificate requires that participants write a paper to prove not only that they have acquired the skills but also that they are able to apply them – and reflect on this application. That’s the “continuous learning” we like participants to leave the programme with, and the Certification paper is a concrete exercise to induce such an attitude.
So it’s a bit like a final exam?
You can also think of it as an optional exam if you like. INSEAD wouldn’t have a great reputation for its MBA programme if there were no qualification at the end. The INSEAD Certificate in Corporate Governance shares such aims. In general, there’s little like this in Executive Education because the “exam” is how you do your job in the company after attending the programme. But there’s no one to check up on many directors’ performances, so they now have the option to put themselves through our Certificate.
What exactly do you need to do to obtain the INSEAD Certificate?
First, you need to have the credibility to be accepted onto the International Directors Programme. We validate this on admission to the programme. Second, you have to complete the programme and attend all the classes. Third, within one year of completing the programme, you have to write a paper that shows you can apply what you’ve learned.
How do candidates go about submitting their Certification paper?
It’s actually a very positive process of which the paper is the final product: an action learning exercise as much as it is a test. We Programme Directors exchange thoughts with candidates after the first draft and we work on it together. They typically satisfy the requirements on the second or third version. The spirit is to activate the learning that took place in the programme and reflection on its application.
What kind of topics have people written about so far?
A common option is to do an audit of the board you are on – and then to write about it. Another way is to write three mini-papers, one after each module of the International Directors Programme, where each paper shows an application of some content of the module.
Have you had any surprises in running the Certificate?
My surprise was that directors are so reluctant to write about themselves. I’ve had to push them to see themselves as the central actor in the play they were writing. My second surprise was that I’ve had so much fun teaching and coaching them through their dissertations. As well as being intelligent high achievers, the certificate holders so far have been amazingly humble, eager to learn and eager to contribute to others’ learning. To be honest, it’s the most enjoyable teaching I’ve done in a long time, if not ever.
Could the Certificate contribute to more women becoming board members?
Yes, I see gender as part of our general commitment to diversity. As it happens, we are about to run a round-table event on the topic. Personally, it’s my ambition that more and more women will see the Certificate as one milestone on their route to board membership.
Do you have any other ambitions for the Certificate?
I’d like INSEAD to become known as the school that pioneered international education and certification for board members – just as it’s known today for introducing the world’s first international MBA over 50 years ago.
Finally, are you a board member yourself at the moment?
Yes, I’m on the boards of a private equity fund in Belgium, a non-profit organisation and two start-ups. I particularly like start-ups because the board can have such a huge impact. It’s the perfect opportunity, like the Certificate, to put my personal learning into practice and to add reality to my teaching.