The Institute of Directors' Nikki Franklin, with chief executive Simon Arcus. Photo / Mark Mitchell.
When Shanghai Maling tabled its joint venture proposal for meat co-operative Silver Fern Farms, there was $7 million set aside for directors' fees and costs.
The pre-planning for continuing professional development caught the eye of Institute of Directors head Simon Arcus.
At its heart, the nearly four-decade old organisation has always been about upholding professional standards among members, but regulatory reform in the past 10 years provided the impetus for a step change, he says.
Last year the institute unveiled plans to introduce a chartered membership, described at the time as the biggest change in the organisation's history. The programme clocked up its first anniversary last month.
"If you look at it historically, it's arisen from an evolution in effect," says Arcus.
"[The Institute of Directors has] gone from being a membership networking organisation where everybody is one and the same as a member, to an organisation that is more of a professional association that offers a training and education pathway and continuous professional development.
"For us in October 2014, that was a 'hold your breath' moment.
"It was a big change from what was criticised as a clubby atmosphere, to something that was more overt about what professional standards really were for directors."
Certainly, grumblings about directors' performance and the need for standards and accountability pre-date last decade's financial meltdown.
Attempts to introduce directors' accreditation in the mid-2000s were derided as a "mutual backslapping exercise" by then head of the Shareholders Association, Bruce Sheppard, and company director Sandy Maier described the IoD's previous accreditation system as an "old boys club", issuing certificates in exchange for a cheque.
At the time, Maier questioned whether the now obsolete certification scheme, which was gained without formal testing or professional development, would be of any use in appointing directors or for shareholders considering investing.
"Overseas directors' organisations forthrightly position their certificates as seals of approval, explicitly meant to raise standards of corporate governance," Maier told the National Business Review in 2005.
Arcus says in creating the chartered membership last year, the organisation looked at two models - the Australian Institute of Company Directors' tiered membership scheme and the the British Institute of Directors' chartered director qualification.
"We decided what we could see in these countries were established and similar governance systems; it would be good to have something that was similar in that sense." He says there has been a widespread movement in more developed economies for directors' institutes to improve governance standards.
"We did take a bit of inspiration from overseas but it also is a home-grown solution in that the specific tiers of membership we have are quite distinctive in their own right."
Arcus says there was some uncertainty about how the IoD's 7000 members would react to the new programme, which creates a staged pathway combining professional development coursework and exams with experience on a board with a meaningful separation between the governance and management functions.
The steps in the chartered programme take directors from associate, to member, to chartered member, to chartered fellow, and require an annual commitment to uphold professional standards.
Everything beyond an associate requires mandatory continuing professional development.
The strongest response he got, says Arcus, was "well, it's about time".
Nikki Franklin, who oversees membership, marketing and communications for the organisation, says in a recent member survey, about 90 per cent of chartered directors said the qualification enhanced their position as a director.
"They're feeling it provides them with recognition of their experience and professionalism; as having reached a certain level of knowledge and experience," Franklin says.
"So it's really good to see that what they hope it could bring is actually what it is bringing."
As a voluntary organisation, there is no compulsion for company directors to be members, which puts some pressure on the IoD to deliver meaningful courses and programmes.
The new standards and compulsory professional development has had the thumbs up from external parties, with Financial Markets Authority boss Rob Everett congratulating the organisation on the move.
"Those sorts of things were really affirming, but ultimately you've still got 7000 people who you need to educate and to change the orientation of what it is to be in this new era and that is part of the challenge for the coming few years," says Arcus.
Franklin says there is still a "journey ahead" in getting wider recognition of the new standards from both stakeholders and the market.
Arcus admits that while the number of people coming through the chartered programmes is "healthy", it is possibly a little slower than the IoD's enthusiasm.
"What we've realised is the members are taking this seriously and they are planning it into their professional development plan," Arcus says.
DIRECTORS BY DEGREES
• To become a chartered member, directors must:
• Already be on the board of a qualifying organisation
• Complete an IoD training course, or the equivalent
• Pass an assessment examination
• Confirm their good character