Burn that C.D.! when you weigh the pros and cons of director certification, you see how convoluted the issue becomes.

• Author: Kaback, Hoffer
• Position: Quiddities

SHOULD "accreditation," "chartering," or "certification" of corporate directors be encouraged? Should it be required?

Yes: Some people serving on boards are not competent to exercise that responsibility. As a means of setting a minimum bar and minimum skill set, we should require the satisfactory completion of prescribed course work leading to award of the formal "C.D." title.

No: Were a C.D. requirement adopted, how would we deal with the entire existing body of corporate directors? By definition, none of them would possess a C.D. Do we grandfather all of them but only for a specified period of time, after which they would need to obtain a C.D.? Do we grandfather them if and only if they don't join any additional boards? Do we force them to resign from boards if they do not obtain a C.D. within a specified period?

When you even begin to explore these questions, you see how convoluted things become. If grandfathered directors are grandfathered only for pre-existing directorships but are required to obtain a C.D. in respect of any new board they join, then, almost certainly: (a) most experienced directors would not wish to join any new boards, and (b) most people joining boards after the C.D. requirement kicked in would be virgin directors. Are not both of these effects clearly negative for corporate governance?

Now, there might be the variation that any director appointed to a board has to have a C.D. but only if he has not previously served as a director, i.e. permanently grandfathering all experienced directors. But then we would have created two classes of directors -- those without a C.D. (and presumably unlikely ever to wish to trouble themselves to get one) and those with it. Which of these two types of directors is the second-class one? Which should receive a higher "rating" from so-called governance rating services? Should a board with more (or with fewer) C.D.-adorned members pay a lower D&O premium?

Yes: Any short-term mechanical issues can be worked out. The searching inquiry is: Why should a director worthy of sitting on a board object to taking a few courses and obtaining a formal C.D.? After all, if he is competent and conscientious, he ought to know this material. Indeed, that is the point: If you don't know -- and are unwilling to demonstrate that you know -- the substantive and ethical material relating to essential directorship skills that C.D. courses will teach, then you aren't qualified to be on a board.

No: Consider...