The following are excerpts from the 2016 Management Law Society’s report on the results of a survey on executive training, which is interesting for the Board Development Institute for Company Directors and Officers (BDTI).

• Survey Period: 2015 Year: 6 ~July July 2015
• Number of responding companies: 176 (consolidated sales) 100 Companies with consolidated sales of 100 billion yen or more 3 (3% of the companies)

From the wording of Principle 4-14 of the CG Code, “As a member of an important governance body of a listed company,” it can be read that the CG Code expects directors to play a supervisory role. However, until now, director training at Japanese listed companies has not focused on improving their supervisory skills. ・・・取締役、特に社外取締役によるモニタリング能力の向上も視野に入れる必要がある。

• Problems and future challenges as seen from the survey results

1. Percentage of executives trained

The implementation rate of executive training was 53.9% for internal directors and 28.9% for external directors. Considering that 73.3% of the companies responding to the survey have consolidated sales of 100 billion yen or more, we cannot shake the impression that the implementation rate is low. It is rare for a director to have acquired sufficient knowledge at the time of appointment, and we feel that it is somewhat unfair to new directors not to provide them with training.

2. Details of implementation

Internal control-related (J-SOX, etc.) 42.4%, Unfair Competition Prevention Law 16.2%, Risk and Crisis Management 25.3%, Corporate Governance Code 13.1%, Financial Accounting 21.2%, Corporate Value Assessment 7.1% (selected from)

Themes related to corporate governance are expected to increase in importance in the future. The contact point between the words “corporate governance” and “director training” is “improving the monitoring ability of outside directors. In the survey, “knowledge of the company’s shareholders, investors, and stock market” and “evaluation of corporate value” were not necessarily high at 17.2% and 7.1%, respectively.

3. Time of executive training

According to the questionnaire, for 50% of the companies, less than 3 hours of training was provided to directors. As mentioned above, this is too little considering the large amount of content that directors need to master. It is essential to devise ways to manage the training, such as focusing on specific examples (examples from their own companies are particularly effective).

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Full text of the “Results of Questionnaire on Executive Training” report (PDF) PDF)