Mac plans course for CEOs

To have private-sector relevance
Mike Pettapiece
The Hamilton Spectator

McMaster wants to send directors of companies, hospitals and agencies to school.

They'll study financial practices, learn about picking key executives and how to run a company properly.

They'll get a diploma of sorts, a chartered director certificate -- the first one in Canada.

"It is absolutely essential for a director to understand the role of business in Canadian society," says Dean Vishwanath Baba, head of the DeGroote School of Business.

McMaster is the lead partner in the venture with the non-profit Conference Board of Canada. It came up with the formal certificate for a program that recognizes directors often have no systematic awareness of how to direct or how to interact with management and society.

Ugly names like Enron and WorldCom -- scandals in which fraudulent companies crashed -- have put the issue of governance even higher on the radar. The boards of those firms were too close to their company leaders and went missing in action.

"This issue is very much on people's screens," says Mark Schacter of the Conference Board in Ottawa. "It's a very live issue and, to my way of thinking, an urgent issue."

The board has long educated directors in a small way -- with one-off, one-day seminars -- but the certificate course would be more structured. It blends the academic rigour of university with the private-sector relevance of the Conference Board.

Many directors have no clear idea of their fit in an organizational picture.

The course would help them learn about accounting, financial management, the value of a company's reputation, assessing their executives and managing intellectual knowledge.

In theory, the course could benefit a charitable group, university board, large public company or a small start-up firm. But the pilot, starting in the fall, will be for the private sector.

The Conference Board approached McMaster about a formal course.

"We thought about other business schools to be sure. But the chemistry just felt right (with McMaster)," said Schacter, director of governance and corporate social responsibility for the conference board.

The core content and use of staff for teaching will be extended later to include other universities, French-speaking schools, specialty law firms, and other organizations.

The directors' college will have a formal home at McMaster. But courses more likely will take place in a setting, over perhaps three days, such as the Conference Board's Niagara Institute in Niagara-on-the-Lake.

Baba said the business school expects to invest about $50,000 "to show our intention -- we are serious about it."

The course will touch on legal issues facing directors; financial management, including audit committees; disclosure of company information; recruiting for and running an effective board; and evaluating management teams.

Teaching might include controversial issues such as how a company treats stock options for executives and whether governance should be more voluntary or codified in securities regulations.

A key element in all this is the role played by smaller and medium-sized companies in Canada's business community -- a far larger role than they do in the U.S. They don't have the resources open to larger, public firms.

"Our focus is -- and we're being encouraged to put our focus on -- the growing number of mid-cap and small companies," said Elliot Schreiber, professor of marketing and reputation management at McMaster.

"Many start-up companies don't understand how to put together a board and run it effectively."

mpettapiece@thespec.com or 905-526-3283.

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