Today’s corporate education programs have attained a level of diversity and comprehensiveness unimagined by previous generations of executives. The modern global business climate has opened up vast sections of fertile territory for new exploration and interaction. The complexities of modern markets have necessitated a new approach to mastering the ever-expanding requirements of finance, risk, and strategy. Technological innovation presents numerous opportunities for growth and expansion as well as challenges. In short, the business world has changed and continues to change at an impressive rate, and the continual accumulation of new knowledge is and will always be an absolute necessity.

The most important reason to look towards executive education programs, however, may not be entirely based on enhancing the skill set of executives and directors, but rather on the all-important goal of appeasing their bosses: the shareholders.

A significant lasting effect of the financial crisis has been that shareholders have become increasingly concerned about the qualifications and personal character of those board members and executives in whom the well-being of their portfolios is entrusted. Now directors and C-suite executives are being called upon, either directly or indirectly, to prove their worth as leaders, and executive education programs can be a valuable tool in demonstrating to shareholders the development of new and relevant skills necessary in a changing economic landscape.

Making the Grade
In fact, executive education’s new justification may be one that the architects of such programs themselves are just beginning to come to grips with: regulators may require these programs. As shareholders watched resentfully, and sometimes vocally, as their portfolios diminished, the first scapegoats often have been directors and executives. Clearly, directors and executives have to prove themselves in different and more convincing ways than pre-Lehman collapse.

The backlash stemming from the financial crisis is that shareholders and regulators are pushing for increased disclosure of the background and qualifications needed for service in the top ranks of a public company. The Securities and Exchange Commission’s proposed Proxy Disclosure and Solicitation Enhancements would require directors to provide more information on their backgrounds and qualifications on proxy forms. With this in mind, the kind of development offered by executive education programs may be just what directors need to prove their mettle to the company’s owners.

“No one school can teach all that’s required to be a director…If you have a board, and you want to make it work more effectively, we can do that.” —Harvard Professor Jay Lorsch

“The issues facing director accountability are very broad, but [executive education] may be persuasive to some shareholders in establishing a director’s value,” says Stanford University Professor Joseph Grundfest. Though directors may face skepticism from shareholders who doubt a company’s management capabilities, enhancements offered by executive education programs can go a long way in convincing shareholders about the commitment and training of their directors.

Harvard’s Jay Lorsch is more skeptical: “No one school can teach all that’s required to be a director.” Lorsch says that while his school’s programs are invaluable in sharpening the skills needed to serve on a board, there is no replacement for years of on-the-job experience; in fact, he says, shareholders may not take such programs into consideration when evaluating directors. “If you’re on the board of a bank, and you don’t know anything about banking, we can’t fix that,” says Lorsch. “If you have a board and you want to make it work more effectively, we can do that.”

One significant, tangible perk of executive education is that many agencies actually will endorse certain programs by granting higher rankings to boards whose directors have participated in such educational opportunities. In fact, ISS Corporate Governance Services, which administers proxy ratings for RiskMetrics, bases its proxy ratings in part on a board’s completion of approved educational programs. (ISS credits can also be earned by attending programs provided by the National Association of Corporate Directors and by Directorship.)

Peer Exchange
For executives with years of experience in a high-pressure daily working environment, time spent on the job is certainly more valuable than hours spent in a classroom setting. There is no substitute for experience, but the vast possibilities offered by new and innovative means of learning can add a new dimension to experience. One significant advantage to executive education, for example, is the opportunity to connect with new people and ideas. “The peer element is crucial,” says Gordon Armstrong, director of marketing at Duke Corporate Education. “Just engaging these smart people in conversation and giving them new ways of thinking about what they already know is very valuable.” Stanford’s Grundfest agrees: “Directors learn a great deal from talking with other directors, and these interactions are a very important element of the work.” It may simply be a matter of new ways of viewing things, says Assistant Dean Whitney Hischier at the UC Berkeley Center for Executive Education: “Oftentimes, if people have been in a particular industry or company for a while, they may have not been exposed to differing points of view. There is a humbling aspect to realizing we don’t all know everything.”

In addition to the engaging minds found among classroom peers, the range of professors in today’s executive education programs is broad—and doesn’t necessarily follow the traditional mold of yore. Though most schools do rely on a core faculty, more often they are bringing in specialists from a variety of fields. “Our professors come from real-world arenas, including international politics, securities studies, environmental politics, and international law,” says Dean Deborah Nutter of the Fletcher School at Tufts University. “And they all bring with them a vital international perspective.”

Engaging the Globe
The curriculum offered by today’s executive education programs reflects the diverse challenges facing today’s executives, directors, and middle managers in a complex and interwoven business environment. The issues of risk management, regulatory compliance, teamwork, problem solving, audit, crisis management, succession planning, asset allocation, and executive compensation that confront today’s business leaders are those which an educational faculty can help tackle. “The world is changing very rapidly,” says Nutter, “and we’re always staying on top of changes in the world to help shape our curriculum.”

Besides the unique educational and networking opportunities afforded by the collaboration of savvy business minds, today’s director education programs focus intently on the new global business frontier. A majority of these programs display an international character, with faculty and curriculum directed towards the possibilities offered by the worldwide market. “We once led a program for Ericsson,” explains Armstrong, “where the executives were faced with a new market in South Africa that they were not at all familiar with. We had them meet with leaders of South African NGOs (non-governmental organizations) and really gain a new cultural understanding they otherwise wouldn’t have had access to.”

“It’s absolutely valuable to do a little exploring of the unknown,” says Hischier. She describes one program in which executives from a Norwegian petroleum company were taken to Brazil, one of their countries of operation. While there, the executives were taken into the field to meet with local oil suppliers, officials with the energy ministry, and community organizations to better understand the day-to-day life of a country that before had been merely a source of product. The field experience, far removed from the confines of the classroom, allowed company executives to see first-hand the reality of a country that until then had been an abstraction.

“If the world were stable, then our programs wouldn’t do much,” says Grundfest. “But the business world now changes so rapidly that even the most experienced directors have more of a reason to spend time educating themselves about these new developments.” Grundfest likens the new opportunities for directors to those available to an experienced surgeon: new techniques, instruments, and drugs that are constantly being developed make continual education a necessity.

Looking Ahead
While traditional educational pathways focus on the lessons to be learned from the past, executive education programs are very much designed towards the future and its possibilities. With the world in flux thanks to a generation-defining recession, directors, executives, and managers at all rungs on the corporate ladder must acclimate themselves to the unique challenges posed by a global marketplace and a regulatory environment far less forgiving than that which nourished the downturn. “There is a broader scope of content to cover now,” attests Hischier. “Our programs are becoming more multidisciplinary in response to a changing world.”

“The job of a director is dynamic and the obligations are changing rapidly, especially in terms of legal exposures,” says Grundfest. “As a result, our programs are changing. We reinvent them every year in response to what’s changing in the world.” While most program directors are still determining how their curriculum will be updated in response to the changes in the market, the most obvious impact is a greater emphasis on risk and its related disciplines. As director and executive education programs change, tomorrow’s leaders would be wise to consider such programs to stay abreast of new and valuable methods of adaptation, innovation, and success.

With the opportunities created by a rapidly evolving spectrum of technology and a global economic frontier that is continually opening its borders to new players, today’s executives and directors must be willing to adapt to a business and governance environment that is constantly shifting. One of the most effective ways of adapting is through the pursuit of professional development offered by executive education programs at top universities around the country.

Successful directors have all spent several thousands of hours in high-pressure, high-impact work environments in which the combined knowledge and instinct of a company’s management team must be shaped into a very specific plan of action. With this kind of real-world experience, in combination with advanced degrees already held by most directors, one might question the practical advantages of going back to the classroom.

The answer is new perspective. “Knowledge has a way of moving at a clip that eclipses very quickly that which was gained in prior formal education,” says Dr. Constantine Konstans, executive director of the Institute for Excellence in Corporate Governance at the University of Texas at Dallas. “Real-world experience is invaluable, but it tends simply to repeat the same processes and outlooks rather than expanding one’s exposure to new ideas.”

Charles Breckling, managing director of marketing at Harvard Business School Executive Education, echoes this sentiment: “The half-life of any educational experience is short. If you’re on a board and received an MBA twenty or thirty years ago, the business climate has changed to the point where you need exposure to new ideas in order to stay sharp.”

The benefits of executive education are worthwhile and far-reaching. In addition to the inherent benefits of gaining access to relevant and new information, the opportunities afforded by working with one’s peers in a “professional classroom” setting are unparalleled. “Our courses have great convening power,” says Breckling. “We bring board members from all over the world, and they in turn bring a broad global outlook you can’t find anywhere else.” In addition to the expertise of the professors, students in these programs often instruct and learn from each other, as their shared experiences provide plenty of case studies.

The range of topics covered by executive education programs entirely encompasses the modern-day business climate. Established programs at Harvard Business School Executive Education, for example, include courses in leadership, strategy, corporate governance, finance, technology management, marketing, negotiation, and personal development—not to mention custom programs designed for a specific company’s needs.

Improved Ratings

While pursuing executive education is certainly beneficial for the individual who takes the course, it also strengthens the board on which he or she sits—and not just by virtue of having the insights of this newly enhanced individual in the company. Many governance ratings agencies look kindly upon boards whose members have participated in executive education programs, and take completion of these programs into consideration when rating companies’ boards.

One such ratings agency is RiskMetrics, whose ISS Corporate Governance Services department determines the best director education programs. “The types of issues that boards are confronted with today—governance fallouts, the mortgage crisis, options backdating scandals—are so new that it’s important for directors to be able to meet with their peers to discuss and strategize,” says John Deosaran, head of product and business development, ESG Analytics, at RiskMetrics Group. “We grant accreditation to those executive education programs that allow directors to tackle the challenging problems of today.”

Because of the knowledge and new energy that a well-educated director or executive can bring back to a management team, it’s not uncommon for a company to grant time off and foot some or all of the bill for an executive going “back to school.” Since these courses can range from one-day intensive sessions to several weeks, and because enrollment fees can range from a few thousand dollars to hundreds of thousands for large groups, it certainly doesn’t hurt to have the blessing (and backing) of the corporation.

When it comes to choosing the path to continued education, options facing the knowledge-hungry officer or director are diverse and plentiful. The two main categories are open-enrollment courses and custom-built programs.

Open-enrollment courses tend to take more time than their custom counterparts, and typically are offered in a more traditional classroom setting. Institutions that offer these programs— typically universities, director groups, or other similar organizations—advertise their courses to the public, and students register independently. Open-enrollment courses tend to assume the traditional forms of a collegiate classroom, with lectures, guest speakers, open discussions, and even campus housing. The Wharton Center for Leadership and Change Management, for example, offers open-enrollment courses that feature a multi-layered classroom experience based on case studies, team exercises, peerto- peer exchange, and other methods of instruction that facilitate dialogue and shared experience between students and faculty. When class concludes, students have access to a guest room and all the amenities of college life, though likely in a slightly more upscale environment than former undergrads may remember.

Custom Fit

Custom-education courses are tailored to the requirements of the company taking the course. The “student body” of a custom program will be composed almost exclusively of executives and directors from a single company. Unlike open enrollment, custom- education programs are organized and shaped through communication between the educational institution offering the program and a representative from the company. The institution determines the needs of a company and then draws up an appropriate program, assembling a curriculum, class site, and instructors selected from a wide pool of available professors, litigators, board members, and regulators.

Because custom programs hinge so directly on the needs of the company taking them, the array of possibilities for educational expansion is literally endless. Most prominent institutions that offer custom programs have worldwide facilities and an international staff of instructors, allowing for truly global educational perspectives.

One such institution, Duke Corporate Education—a not-for-profit owned by Duke University—offers programs throughout the world. “Our business model has cut itself off geographically from the school,” says marketing director Paul Baerman, “allowing us maximum versatility in going where our clients need to be. A narrow perspective in the boardroom can be greatly enhanced by exposure to broader international territories.”

While some executive education programs take a straightforward instructional path, some push the boundaries well past the familiar. Baerman recounts a custom program in which members of a boardroom were brought to a hospital and told to don the uniform of the hospital’s employees. They were separated and individually greeted by an oncologist who gave them the weighty task of informing a patient (actually an actor) that he had cancer. In nearly all of the cases, the student was unable to break the bad news, and either circumvented the facts or retreated for “further information.” The lesson? “Even in a life-or-death situation, the director was unable to address that which needed to be addressed,” says Baerman. “After the ploy was revealed, these directors discussed and came to the conclusion that honesty and straightforwardness are the most important aspects of communication. This is a revelation that has an immediate effect in the boardroom.”

Despite the myriad programs, instructional methods, and offerings available, executive education programs all share a common purpose: better boardroom and executive performance. This goal is facilitated by a well-designed program led by engaging, knowledgeable instructors with real-world as well as theoretical understanding, but the key to improvement may in fact lie within the students themselves.

“What we teach isn’t so much an academic or professional solution to a problem, but rather a personal one,” explains Baerman. “One of our sayings is ‘the answer is often in the room, which means that we don’t so much teach you something new, but we guide you through finding it within your own capabilities and experiences.”

For program details visit:

UCLA’s Director Education & Certification Program

October 27-29, 2008

UCLA Anderson

Florida’s Directors’ Institute

Friday November 7, 2008

The University of Tampa

The Directors’ Consortium

February 25-27, 2009

Stanford,CA

Harvard Business School Executive Education

Audit Committees in a New Era Of Governance

July 2009

Compensation Committees: New Challenges, New Solutions

July 2009

Making Corporate Boards More Effective

July 2008