Director education is underestimated.

• Author: Horner, Constance
• Position: ROAD TO XL

Ed. Note: "Creating and Sustaining the Strong Director" [Winter 2002] is the title we gave to Constance Horner's article, and it is a phrase that could well serve as the mission statement of Directors & Boards. Horner at the time was a guest scholar at the Brookings Institution in Washington, D.C., and a director of Pfizer Inc., Prudential Financial Inc., Ingersoll-Rand Co., and Foster-Wheeler Corp. (She was named Pfizer's lead director in 2007 and she retired from the board at the company's 2015 annual meeting.) The major focus of her article was the importance of director education. Following is an excerpt.

My experience is that both companies and directors underestimate both the quality and the quantity of time needed to perform the oversight role. Directorships may be honors, but they are also jobs. Fulfilling the obligations of an informed, engaged, assertive, independent director can take between 200 and 250 hours a year, especially in the first year or two or when a company confronts an unusual challenge.

Much of that time will be devoted to education --about the company and its industry, as well as its business, regulatory, and legal environments.

Just consider a few issues faced by a typical board, from A to Z: antitrust, best practices, competition, diversification, emerging markets, foreign exchange, globalism, hedging, investor relations, litigation, manufacturing, new markets, 10-Qs, patents, research, shareholder initiatives, technology, unions, value-building, writeoffs, executive compensation, youth marketing, and yes, zealous investors.

It's easy to understand why a directorship can take the equivalent of a month's worth of work to execute properly. If you are a director, your focus for 200 to 250 hours a year represents a huge investment of your time, talent and energy. But this director education serves as the foundation for your...