50377 AUGUST 2009 ABOUT THE AUTHOR From Takeoff to Landing in Accrediting YEHIA EL HUSSEINY Corporate Governance Training Programs is a member of IFC's Corporate Governance Program, which is part of IFC Advisory Services Most of the OECD member countries have training institutions that in the Middle East and North offer corporate governance courses and programs for directors (e.g., Africa (AS MENA), formerly known as the Private the Institute of Directors in the United Kingdom, the National Enterprise Partnership for the Middle East and North Africa Association of Corporate Directors in the United States) that have (PEP-MENA). received independent accreditation1. There is a high demand among APPROVING MANAGER corporate governance institutes and institutes of directors in the Martin Steindl, Program Manager, IFC Corporate Middle East and North Africa (MENA) region and possibly other regions Governance, AS MENA. to have training programs that are accredited by recognized international bodies. Background for successful completion of the training program. The IFC Egypt Corporate Governance Project (ECGP) strived to create a culture of good Soon after this first course, it became quite corporate governance in Egypt, and, despite clear that there is a demand among corporate its short lifetime of two years, managed to governance institutes and institutes of pave the way for such culture. The ECGP directors in MENA to have training programs helped the Ministry of Investment create the accredited by recognized international bodies. Egyptian Institute of Directors (EIOD) and Accredited programs are held in high esteem strongly supported its activities over the by participants because they not only benefit lifetime of the project2. from the learning experience during the training but also become certified. In May 2007, ECGP offered the "Board Development Series," or BDS for short. After researching and asking within IFC to Designed by four officers, the program obtain an answer as to whether IFC could consisted of 24 modules with 72 hours of accredit training courses and/or certify training over 12 non-consecutive days. It was directors, the answer was simply "no" because the first such program to be available in the IFC is not an accreditation body. And yet we region and was carried out through the EIOD. own the know-how. We have the expertise to The first group of trainees included 25 high- formulate and develop training programs. profile delegates from prestigious large Because no other corporate governance corporations and banks in Egypt. project in IFC has pursued the opportunity of seeking accreditation for a corporate The participants much appreciated the governance training course, we decided to knowledge gained from this intensive become pioneers, and along the way we program, but at the end of the first of four learned some valuable lessons. parts, they asked us if we granted certification3 1 According to Wikipedia, accreditation is a type of quality assur- Lessons Learned ance process under which services and operations of an educa- tional institution or program are evaluated by an external body to determine if applicable standards are met. If the standards are met, 1) Make sure that the accreditation agency accredited status is granted by the agency. is reputable and credible. 2 At a later stage, ECGP supported the creation of a local resource faculty that is easily able to carry the organization and delivery of technical training events forward. As a result, the EIOD reached a of certain characteristics of an object, person, or organization. One level where it successfully organizes technical training events in of the most common types of certification in modern society is a sustainable manner without further support needed from the professional certification, where a person is certified as being able project. to competently complete a job or task, usually by passing an ex- 3 According to Wikipedia, certification refers to the confirmation amination. IFC SMARTLESSONS -- AUGUST 2009 1 We knew for sure that selecting the right accreditation Here are some examples of these standards: body would be a key starting point to the success and sustainability of the BDS program. But the big challenge in · The program must consist of a minimum of 8 hours of our case was to find a reputable, credible agency that instruction. would accredit a corporate governance training program. · The curriculum must focus on improving a company's Unfortunately there is no list of accreditation agencies, corporate governance practices. Programs should address especially when it comes to corporate governance programs. topics such as board oversight of management, the work We contacted several corporate governance experts within of the key board committees, board performance IFC as well as from other top-notch corporate governance evaluations, succession planning, etc. institutions, such as the National Association of Corporate Directors (NACD) and the Conference Board. Many of them referred RiskMetrics to us. RiskMetrics Group, formerly known as "Institutional Shareholder Services," is a worldwide proxy and corporate governance service provider committed to helping companies improve their corporate governance. As part of this commitment, RiskMetrics Group accredits director education programs that foster improved corporate governance practices. By accrediting selected director education programs, directors are exposed to today's best practices in corporate governance. Only director education IFC team participating in discussions during the Board classes that meet or exceed RiskMetrics Group's standards Development Series training program. receive accreditation. Each curriculum is evaluated based on the promotion of strong corporate governance practices. The BDS met all the standards except for one condition, Since its initial release in June 2002, RiskMetrics Group's which was that at least 25 percent of the speakers must be Corporate Governance Quotient (CGQ®) has become the current or former directors of publicly traded companies. industry standard for rating companies on their governance structure and practices. RiskMetrics has accredited more This was a bit tricky, because we were planning to deliver than 50 leading programs, including the NACD, the Stanford the entire program ourselves. But we managed to get the Directors' Summit, the Harvard Business School, the speakers on board through screening, interviews, selection, Conference Board, and the Wharton/SpencerStuart etc., and provided them with training-of-trainers sessions. Directors' Institute. We also relied on our senior operations manager more than once to deliver two modules, because he had previously Directors attending an accredited director education served on different boards. program gain valuable insights, and RiskMetrics Group will take this continuing education into consideration when 3) Allocate time and resources for preparation of a lot of evaluating their company's CGQ® score. CGQ® credit for material. companies with directors attending an accredited program lasts for two years. To expedite the accreditation process, make sure that you prepare the basic information in advance. For instance, 2) Ensure that your program meets the accrediting basic information can include the title of your training agency's expectations. program (which should be standard for all your documentation), the sponsor (IFC, in our case) and training Before you start the process of accreditation, review the provider (IFC partner), the program agenda, and program accrediting agency's standards and requirements to make dates. Submit the basic information along with your first sure your program meets them and, if not, whether you request. could alter the program to meet these qualifications. Later, when the agency contacts you, it will require more You don't want to be in a situation where you apply and in-depth information, which can include such things as the receive a refusal. This might have negative implications for detailed outlines and instructor sheets of every program your program, for IFC, and for your partner. Especially in module; the number of delivery hours for each topic in the MENA region, word of mouth is very powerful, and every module and the means of delivery; the curriculum negative word of mouth can kill a program before it even materials, exercises, cases, and support and reference starts. materials; the trainers' recent biographies, including their experience that is relevant to the topic to be delivered; According to RiskMetrics, "Only director education classes annexes, references, and additional resources; and sample that meet or exceed RiskMetrics Group's standards receive and model documents. accreditation." 2 IFC SMARTLESSONS -- AUGUST 2009 out we were right. The implication of our requirement is that participants who pay and attend the BDS will not receive certification unless they meet our requirements and those of RiskMetrics. Conclusion The whole process of accreditation by RiskMetrics took us six months. It may be a prolonged process, but the benefits are enormous. The RiskMetrics charge for accreditation was zero; hence there was no IFC team delivering the training to the first cost involved, apart from the time of IFC staff group of certified directors member(s). There were other benefits, too: · International accreditation, which entitled You should be ready and reply directly. Don't program participants to carry the "certified underestimate; there is a tremendous amount director" title, had a profound marketing of information needed, and the work to be impact on the demand for repetitions of carried out is huge and needs a lot of time to the training program. Before accreditation, complete. But once you collect all that is the course was a bit hard to sell. For needed, there is a high certainty that the example, in Egypt before the program program will be accredited. It goes without was accredited, the EIOD had trouble saying that all of these materials and much getting one group of trainees (about 17 more should be in a standardized format, participants) to attend during the first six edited and reviewed by professionals, and months. After accreditation, the same definitely approved by your manager. institute easily gets four to five intakes a year. One of IFC's partners, for instance, The accrediting agency will then have a now organizes the BDS training program committee review the program, request any four times a year, in English and Arabic. additional information or documentation, if With each of these courses, the partner necessary, suggest changes, etc. Benchmarked earns more than $100,000 per year. against the accrediting agency's standards; the · The accredited BDS, which became the committee then decides whether to accredit flagship of the EIOD, supported the IFC exit the program. strategy not only in terms of the financial sustainability of the institute, but also 4) Once accredited, add your own requisites because RiskMetrics' continuous follow-up to boost credibility. and supervision of the EIOD ensure that the training program consistently retains its You can take the accreditation body standards high quality. to the next level and add your own requisites · RiskMetrics has granted automatic to the certification stage. According to accreditation to the same BDS training Wikipedia, certification requires providing program offered by other IFC partners, such proof of passing standards or meeting as the Pakistan Institute of Corporate predetermined requirements for certification. Governance and the UAE's Mudara Institute DISCLAIMER This may include meeting continuous or of Directors. IFC SmartLessons is an awards regular review requirements. Professional program to share lessons learned in development-oriented advisory certification for individuals usually requires services and investment experience and the passing of knowledge or operations. The findings, competence tests. interpretations, and conclusions expressed in this paper are those For instance, RiskMetrics grants certification of the author(s) and do not necessarily reflect the views of IFC after participants have completed a minimum or its partner organizations, the of 8 credit hours out of the total BDS 12 credit Executive Directors of The World hours. We added an additional requirement Bank or the governments they of successfully passing self-evaluations represent. IFC does not assume any responsibility for the (approximately 240 multiple-choice questions) completeness or accuracy of the where the minimum pass rate is 80 percent for information contained in this the combined results. This was and still is not a document. Please see the terms condition imposed by RiskMetrics, but we IFC team delivering the training to the second and conditions at www.ifc.org/ believe that having this requirement will add group of certified directors. smartlessons or contact the program at smartlessons@ifc.org. more credibility to the program. And it turns IFC SMARTLESSONS -- AUGUST 2009 3