How to Educate and Upskill Directors and Boards on Critical Issues

This chapter by NACD’s Friso van der Oord appears in a larger report from the New York Stock Exchange and J.P. Morgan, Public Company Series: Board Structure and Composition. The report is part of a joint initiative to strengthen board leadership and provide practical guidance from directors and governance experts.

From NACD’s founding nearly a half century ago, to developing Director Professionalism^®, to the New York Stock Exchange (NYSE)’s bold educational recommendations at the turn of this century, to current innovations in board learning channels, director education continues to be an indispensable and ever-improving pathway to enterprise success. 

Nearly a quarter century ago, the NYSE raised the stakes on director education with an important new listing rule. On 4 November 2003, the exchange became the first US authority to require formal assurance of ongoing director education. Specifically, as part of the new Section 303A on Corporate Governance in its listing manual, NYSE-listed company boards were required to develop and disclose governance guidelines that included a description of the company’s “continuing education and orientation of directors.” 

The NYSE-National Association of Corporate Directors Connection 

The National Association of Corporate Directors (NACD), founded in 1977 to help directors become successful stewards of long-term corporate value through education and peer-to-peer networking, was immediately supportive of this recommendation. The group of prominent corporate board members and advisors behind the new NYSE listing rule—namely, the NYSE Corporate Accountability and Listing Standards Committee—cited NACD and several universities as authorities in director education at the time they convened, in advance of the listing rule. In the June 2002 report that led to the new listing rule, the Committee urged the NYSE to host educational programs for directors, collaborating with others such as NACD. The landmark NYSE report quoted NACD in stating that, “Boards should provide new directors with a director orientation program to familiarize them with their companies’ business, industry trends, and recommended governance practices,” adding “Boards should also ensure that directors are continually updated on these matters.” 

At that turning point in history, NACD also suggested that the NYSE and other exchanges consider making director orientation and continuing education mandatory. “Mandating director education would not be difficult, and the benefits would be great. Many organizations offer industry education, and a small but growing number of organizations, including several leading universities and the NACD, provide education in governance,” we noted, concluding that “This type of education seems particularly critical today, when there is a heightened need for directors to maintain a current knowledge of governance issues and practices.” These same words could well apply in 2025 and beyond, as critical economic and regulatory changes are increasing demands on boards.

The Role of Crisis in Raising Educational Expectations

Indeed, crisis is what prompted the NYSE to require director education at the turn of the current century and what catapulted the NACD into the field a generation before. A major impetus for the founding of NACD was the series of scandals involving foreign payments that led to the Foreign Corrupt Practices Act of 1977, which gave boards new responsibilities for overseeing corporate accounting. Similarly, the new NYSE requirements to make disclosures about director education emerged in the wake of the Enron and WorldCom scandals and passage of the Sarbanes-Oxley Act in 2002. At both historic moments, there was a realization that suddenly directors needed to become more accountable and increase their performance, strengthening their effectiveness in a short period of time—not only as individuals but also as boards.

Responding to Permacrisis

Today, we do not need a crisis to remind us of the importance of educating and upskilling directors. We are living in what has been called permacrisis. Directors are not merely facing a single event, such as a major piece of legislation. Rather, they experience disruptive events regularly, prompting new learning needs.

The results of NACD’s most recent Trends and Priorities Survey, published in our 2025 Governance Outlook publication, revealed that nearly half of all respondents (48%) believe that crisis-like disruptions are happening more frequently now compared to 5 years ago. Nearly three quarters of respondents (73%) agreed that the sheer number of issues an individual director must monitor has increased over the past 5 years, and a similar percentage (74%) have noticed an expansion of board agendas. Not surprisingly, 43% of respondents said that, for them, director education is important to some degree. Only 5% said that improvements were “not important.”

One example of a continually disruptive issue is the emergence and disruptive force of artificial intelligence and other new technologies, which was the topic of NACD’s 2024 Blue Ribbon Commission report. Multiple forces are driving the urgency of technology education for boards—from the compression of strategy timelines to the speed of new innovations outpacing director experience. Even the job of being a director is affected by new applications of emerging tech.

Trends like these suggest a need for continuous learning. As mentioned earlier, NYSE listing guidelines require a proxy statement disclosure on director education, and based on recent disclosures it is clear that boards are rising to the challenge. And although director education is still not mandated by the government or the stock exchanges, both the major stock exchanges offer educational programs and have expressed support for NACD’s programs and for various university programs that exist to this day. As for NACD, there has always been heavy uptake on our educational offerings—from in-person programs, which we have been offering for nearly half a century, to online programs and our more recent work over the past decade in director certification (see NACD’s Education Track Record).

Principles of Director Education

Over the years, NACD has provided guidance on how boards and directors can approach continuous learning, based on the timeless recommendations from the NACD community. Educational approaches must be adapted to the directors and boards served, depending on company type, maturity, size and industry. A curriculum for a cooperative will vary greatly from one for a mutual fund; a local start-up will not have the same demands as a global multinational, and a bank board will need a learning track different from that of a chip manufacturer. This said, there are a few general principles that boards can consider.

Application to director development and evaluation

Education of directors—whether provided internally or externally—should be customized to the needs of individual directors and to the board. If a director or board is not performing as well as expected due to some deficiency of expertise, the director or group of directors should be given the opportunity to receive education in the area.

Attention to process

Director learning involves more than content: the what and why of the subjects to be explored. It also involves attention to process: the who, when and how of the learning program. Who will be responsible for ensuring an effective approach? Typically, this will be the chair of the governance committee, supported by the corporate secretary, but each board can make its own determination. As far as the “when” of timing goes, director education should be planned in advance from on boarding to offboarding, making adjustments as circumstances require. And as for the “how” of education goes, variety is the key (see Multi-modality).

Commitment to continuing education

Although board education starts at orientation, it should be thought of along a continuum from the start of a director’s term to its end. Furthermore, boards can benefit by paying attention to both the educational track of individual directors and the entire board as a group. The call to director learning is a collective mandate for the whole board to stay constantly curious. Board members must make a commitment to learn together, whether through briefings facilitated by outsiders or dynamic wargaming with management. In their ongoing discussions they can also learn from each other and use learning together to surface critical board issues or help inform decisions.

Knowledge refresh

Longer-serving directors will benefit from periodically refreshing their knowledge of the basics, for example by joining new director orientations or scheduled management trainings on critical issues, such as compliance, security and cultural matters.

Learning from lived experience

The experience of other boards—whether reported in the news or recalled from the director’s personal board service—can provide important insights on the failure vs. success of oversight, and can spark discussions and understanding of any vulnerabilities that exist on the current board.

Linkage to enterprise business and strategy

Directors have an obligation to acquire extensive, current knowledge of the organizations they serve, including products and services, relevant technology, markets and economics, and the strategic position of the enterprise (strengths, weaknesses, opportunities and threats). The learning plan for boards and their members should be based on an analysis of what learning must occur for the advancement of the enterprise’s strategy. For example, the board of a wholesaler that plans to diversify into retail should have firm knowledge of the strategic landscape for retail in the company’s field. This level of education helps to make a board a “strategic asset.” This approach can be supported through experiential learning, where the board visits company stores and production sites and meets local staff.

Maintenance of relevant expertise

Directors should maintain leadership in the field of endeavor that led the board to recruit them. If the board recruited a candidate because the director had financial expertise, that director should be sure to keep up with financial trends. Similarly, if the board has recruited a recently retired CEO because of the candidate’s experience in senior management, that director should stay current with the world of business and the latest management thought and practice.

Multi-modality

Director education need not be confined to one modality. From small group sessions to major conferences, education covers a wide terrain. Many boards encourage their directors to visit enterprise locations, such as branches, stores or factories. Attendance at trade shows can also be instructive. Meetings with suppliers, key customers and investors can be additional ways to educate board members. Any educational program created by boards can consider a mix of online and in-person meetings, including strategic retreats and attendance at educational events. Permian Resources, an NYSE-listed company, notes as follows in its 2024 proxy statement: “When a new director joins our Board, we provide a director orientation. Directors are also encouraged to attend continuing education programs designed to enhance the performance and competencies of individual directors and our Board, including through participation in National Association of Corporate Directors events.”

Oversight at board level

The board should take accountability for developing an educational program for individual directors and for the board as a collective. The responsible party may be the chair, the lead director, the chair of the nominating and governance committee or the corporate secretary.

Personal accountability for learning

The competent director takes responsibility for developing a personal educational program that fills any gaps left by the board’s program. For example, if everyone else on the board has financial expertise but the director does not, then the director should seek learning on that topic, informing the board of this training (see Tracking).

Range of topics—including fundamentals

All directors, whether new or seasoned, can benefit from a blend of basic and emerging topics. Competent directorship requires an understanding of core topics such as corporate directors’ responsibilities and the general legal principles that guide director conduct. Other core issues include how to work with management, managing crisis, financial reporting and CEO succession. This material is not one and done; it can change over time. So the board’s educational curriculum should also include emerging issues in financial markets, technology, climate change, cybersecurity and other headline issues.

Robust planning

Developing a learning plan for a board and its members requires the same level of attention and discipline that any training program demands. Boards should be able to describe their educational programs in a way that gives stakeholders assurance that the leadership at board level has the requisite knowledge and skills to guide the enterprise into the future. An effective learning plan will draw from a variety of resources, including ad hoc use of an outside consultant and/or an advisory board that supplements the expertise of the board (e.g. a cybersecurity expert or a technology advisory board), presentations by management, self-directed research, and accredited outside events and conferences that meet the standards set by the program.

Timing synced to the board calendar

Board educational programs will be most effective if they are coordinated with the board’s calendar of work. For example, any education in compensation should take place prior to the time the compensation committee and the board vote on the senior executive incentive plan.

Tracking the education journey

Boards, through the nominating and governance committee (or similar committee), should track what education directors have upon beginning service and what they acquire during service. The corporate secretary or other appropriate person should keep a record of the education journey for both board members and the board as a whole.

Upskilling

Director education should focus on skills—what directors can do—as well as knowledge—what they know. Examples include financial acumen, critical thinking for decision-making, team dynamics, and communication (speaking and listening). The full educational plan might include facilitated learning sessions focusing specifically on such skills.

Conclusion

It has been a quarter century since the NACD recommended mandating director education for all public companies, and since the NYSE required such education as part of governance guidelines. Since that time, an entire cottage industry has arisen for director education—always a healthy phenomenon. NACD is proud to be a part of this broad movement to help directors and boards be the best they can be.

Friso van der Oord is the senior vice president of content at National Association of Corporate Directors (NACD), and is responsible for overseeing all NACD content development. He is an experienced governance advisor and business line manager, who has worked over the past 15 years with Fortune 500 and global executives on major risk, compliance and integrity challenges, including serving in leadership roles at Corporate Executive Board (CEB) and LRN Corporation (LRN). He holds an MA in international relations from Johns Hopkins University’s SAIS Program.