Despite looming budget cuts and mindful spending, one area companies are not cutting back on is executive training. Instead of relying primarily on keynotes, panel discussions and lectures, executive education programs are adjusting their scope and style to provide a more active learning experience, using real-world case studies and real-time problem-solving to offer a more dynamic experience. “There’s been an 
uptick in attendance,” says Whitney Hischier, assistant dean at the Center for Executive Education at UC Berkeley’s Haas School of Business. “You’d think in a down economy, people would think training cuts—but that’s not the case. There’s a new openness to coming back and learning.” To keep pace with everything from crisis management to international commerce to web-based communication, executives are recognizing the necessity of continually updating their skill-set and interacting with peers and experts to maintain a cutting-edge sensibility.
Preparation starts even before the first class. “I want you to do some thinking, meditation and preparation before you walk through that door,” says Stephen Burnett, associate dean for executive programs and professor of strategic management at Northwestern University’s Kellogg School of Business. “I want you to meet with your boss and subordinates, think about your own situation and what you personally want from this experience.” Unlike an MBA course, many executive education classes and seminars allow participants the opportunity to bring their real-life corporate dramas to the classroom. Burnett advises executives and directors to have a different perspective on the learning experience: “This isn’t a movie you’re going to sit back and watch—you can change the executive program by the questions you ask, by who you talk to and what you ask them.”
Rather than view the seminar or course as just another class, today’s schools are emphasizing the need for participants to enter the classroom with the intent to discuss their own corporation’s issues and find solutions. “We’ve been counseling very hard to get committees or management staff to think about their proxy statement as a message of engagement…[an opportunity] to get to know shareholders,” says Ira Millstein, senior associate dean for corporate governance and Eugene F. Williams Jr. Visiting Professor in Competitive Enterprise and Strategy at Yale School of Management. “Communication with shareholders could be the most important thing right now [for directors to focus on], because shareholders are so much more powerful.”
Strategy is also a major area of interest for executives and directors, who are often looking how to best lead their companies as the economy reels from bad decisions and heightened government regulation. “Executive education is now seen as a tool for implementing strategy,” Darden Executive CEO David Newkirk says, adding that many clients attend programs to adjust to changing roles and deal with the effect on the entire organization, not just upper management and the board. He notes that executives and directors find themselves asking: “How do I take the next 200 to 1,000 people and help them understand the strategy and how their roles will change and then give them the capabilities to implement that new strategy?”
Directors in particular are beginning to realize that traditional skills are no longer enough to ensure effective boardroom performance. “The directors who join us,” says Liz Barron, director of education for the NACD, “really want practical solutions based on boardroom experience. We’ve seen a huge interest in committee processes—the chairs of nominating and governance, audit and compensation committees—come to us looking a little green about the gills and find the work we’re doing on performance metrics, audit-committee processes and our proxy-disclosure template really helpful. Their complexions improve as their confidence begins to grow and they begin to see new ways of keeping on top of their workload and providing the right amount of oversight.”
No Room for Complacency
When a corporation sends C-suite executives or corporate directors to learn more about strategy, risk or compensation, they expect lessons to be applied in real time. Many of today’s most acclaimed institutions welcome this one-on-one interaction, using participants’ experiences as tools that are as highly valued as classroom texts and keynote speakers. “Many times you listen to one panel, move on and then onward…you only have time to raise your hand and maybe get a question answered—that’s it,” says Kip Kelly, director of marketing at the University of North Carolina Executive Development. “At UNC, we’re moving toward smaller post-panel group sessions with longer breaks.”
Instead of having topic-specific breakout sessions, UNC has instituted “problem-solving sessions,” allowing directors and executives the opportunity to share situations they are facing with others who may have already had similar issues. “Instead of rushing to the stage to ask the speaker a question, participants can have real discussions back and forth with speakers,” says Linda Selbach, program director of the Director Development Institute at UNC.
An interesting pool of participants is enticing, but the main keynote attraction is also vital, as participants want to hear from high-profile personalities deeply involved in some of today’s most tumultuous and challenging situations. “Last semester, Hank Paulson was interviewed by John Mack on campus; Tim Geithner gave his first post Dodd-Frank passage here at Stern,” says Joanne Hvala, associate dean, marketing and external relations at New York University’s Stern School of Business. “We were able to invite some of our students to attend, as well as stream the discussions online—history-making experiences right here on campus.”
Location and accessibility to regulators in Washington also can be helpful, as the government and Securities and Exchange Commission continue to increase regulation. “We’re able to attract the policy makers,” says Stephen Wallenstein, who oversees the Director’s Institute and is a senior fellow of finance at the University of Maryland’s Robert H. Smith School of Business. “Half of our program is composed of breakout sessions composed of 15 to 20 people—people are not just listening passively, because we try to mix in some of the substantive areas that we think are important for all directors, with an equal number of breakout sessions.”
Collaborative Approach
Some universities find that combining their expansive repertoires can provide a unique experience for participants. Stanford’s Graduate School of Business, Dartmouth’s Tuck Executive Education program and the University of Chicago’s Booth School of Business have combined resources to offer a wide array of faculty and speakers for executive education attendees. Sean Bandarkar, managing director of program and business development of executive education at Stanford, believes that having research from top faculty in the field of corporate governance from three universities offers a unique perspective for program participants. “The key thing that we do is bring in the university’s point of view…but we also balance that with the knowledge and experience from our participants,” Bandarkar says. “If you bring in too much of a university point of view, you don’t get the real experiences; without the faculty, however, you just get a room full of war stories with no structure.”
The method of teaching also contributes to a successful executive program. “Unlike in a lecture for an MBA, in an executive education program you need a faculty member who is such an expert that they’re willing to let go and take a conversation or exercise elsewhere—where they may not have even thought of originally or intended,” says Clark Callahan, executive director of Tuck Executive Education at Dartmouth. “It takes a master to be able to do that.” Callahan believes confidence and presence are also factors when selecting potential speakers and panelists. “It is important to have credibility when you walk into a room,” Callahan adds. “You are a source that people should be listening to.”
The proper blend of academia and real-world experience is key to a successful and engaging seminar. “Academics have the luxury of having a lot of time to get things done,” says David Heckman, practice leader, senior management, at The Aresty Institute of Executive Education at The Wharton School at the University of Pennsylvania. “Practitioners are good at saying, ‘These things need to be perfect.’ We understand that the people attending our seminars need to get things done—and quickly.” Instead of being stuck in “modalities,” Heckman emphasizes that Wharton, as with many other institutions, works toward blending the perspective of academia without falling victim to irrelevant or overly theoretical viewpoints.
Understanding and solving real-world situations is key. For example, as the relationship between the C-suite and board continues to evolve, how to handle unexpected problems is of growing concern. “After the Toyota episode and BP’s ongoing clean-up, boards are reflecting on their role in a crisis situation. We’re planning to run an exercise for senior executives in the C-suite,” Heckman explains, “where these executives must persuade the board—and the board is on the hook to do due diligence—to discover the communication in working together.”
Deep Dives
At UCLA Anderson’s Director Education and Certification program, the course focuses specifically on serving as a corporate director. Robert Humphrey Gyde, associate director of marketing, UCLA Anderson Executive Education, says the basics haven’t changed, but UCLA is gearing its program to post economic-crisis directors seeking guidance in this new uncertain environment. “We appeal to both the senior director as well as a fresh face in the boardroom—both sides have much to learn from one another,” Gyde says. However, while the basics have remained relatively the same, with emphasis placed on strategy, structure and succession, Gyde believes that post-crisis, many directors feel the need to “refresh” themselves. “One thing that is becoming more pressing in the director environment is the need to understand how best to engage with activist shareholders,” Gyde says. “They’re becoming much more savvy—much more web savvy; one reads about caucuses arising online and boards need to think carefully about how they are going to engage with their shareholders.”
The SEC’s recent decision to allow proxy access to shareholders has created an onslaught of activity as directors seek to educate themselves on the implications of the new rules. “Of course, there is now a huge interest in the proxy and how to develop a relationship with shareowners that goes beyond disclosure,” reports Liz Barron, NACD director of education. Case in point: more than 900 people signed up on short notice for a proxy-access related webinar. “There’s a feeling that directors need up-to-the minute insights,” notes Barron. “They need to know what to do now—and what to do next.”
Shareholders have harnessed the power allotted them in virtual chat forums and blogs, allowing them to access the investing public at a faster and more efficient rate than ever before. Directors, whether experienced or new to the boardroom, must address these ever-changing channels of communication. “I think experienced directors may feel they can learn a lot from a new generation of directors who are now entering the boardroom,” Gyde adds. “These new directors have thrived in this new economic, web-based environment—being collegial will offer you a wider perspective on the new reality.”
As the industry continues to change, the face of the boardroom may look far different: Executives in their 30s (and sometimes 20s) are advancing more quickly through the ranks. Gyde believes that while who in academia is leading the learning experience is integral to the success of a program, “who you’re in the room with can be just as valuable as what’s being delivered from the platform.”
Globalization Is Here
As the economic ripple-effect crosses international waters, many executive education programs attract directors serving in the EU, Africa, the Middle East and Asia. “We’re also getting people from Middle Eastern countries, representing sovereign wealth funds, oftentimes, for a European public company,” says Jay Lorsch, Louis Kirstein professor of human relations at Harvard Business School. “We’re getting people from Latin America as well, especially Brazil, as well as India, because many companies are moving from family companies to public companies.” These executives travel to better understand corporate governance issues from a global perspective and attending Harvard’s program allows them to network with colleagues in similar situations, Lorsch says.
“Executive education is now seen as a tool for implementing strategy. How do I take the next 200 to 1,000 people and help them understand the strategy?” — David Newkirk, Darden Executive
“Globalization is real now—we don’t have to teach it,” Darden’s Newkirk says. “There’s a lot of emphasis on cost and quality when running a global business. Many companies have already internalized a cost culture.” Newkirk believes firms are addressing how to best understand customers, create better relationships with external and internal business partners and become a leader in their industry. “How do I take this company and make it innovative?” Newkirk asks. In addition, as emerging markets in China, Brazil and India take hold, the need to stay competitive is forcing executives and directors to form new strategies.
The Diversity Issue
As the economy shifts and companies find themselves regrouping, boardroom demographics are slowly changing as well. While the lack of presence of women and minorities in the C-suite and boardroom remains an issue, executive programs are attempting to encourage increased participation. “We get companies who complain that our classrooms aren’t diverse enough—and then they send us five white males,” Newkirk laments. “We don’t make diversity a requirement…but we offer scholarships to women from nonprofits and we’ve got a program for National Aerospace Company, which we’ve held in Beijing, Tokyo and Hanoi.”
Overall, women and minorities are attending more classes to prepare for C-suite and boardroom responsibilities. “Our last board program group was more than 50 percent women,” UC Berkeley’s Hischier says. “But it seems there is still a pretty small pool of candidates.” While it’s slow going, the C-suite and boardroom are edging along in the right direction. Education is important to avoid the caveat of simply fulfilling quotas.
As the regulatory environment continues to train a spotlight on the practices of financial institutions, executives and directors will continue finding issues such as strategy, risk, crisis management and shareholder communications at the top of their agendas. Today’s executives find themselves evaluating the current economic environment and attempting to keep up with the frenetic, volatile world of the Internet and mass media. Whether fresh-faced or a seasoned pro, today’s executives and directors will continue to need and demand ongoing educational opportunities to reexamine the fundamentals of good corporate governance and strategy, as well as staying current with emerging and ever-changing global economic business challenges.