Aussie board of directors tested over credentials
Aussie board of directors tested over credentials
Jul 29, 2005: A new online test has been created to find out whether board members are fit to govern by throwing at them 130 questions that cover the core competencies of financial literacy, corporate governance, risk management and internal controls.
The Australian-design proficiency review for directors and financial executives is aimed at addressing the lack of expertise and proficiency at senior levels.
It is led by Con Livissianis to develop the Exemplar Performance Advantage Director's Evaluation range of on-line programmes so that key executives at board or director level can be tested on their knowledge of Australian laws and financial battlefields.
Livissianis said that many of the corporate wrecks could have been averted if more attention was devoted to the financial skills of directors as a business grew.
"It is highlighted at the recruitment stage. Unless you are a financial person who can discuss fluctuations in the EPS and DPS, executives's credentials are taken pretty much at face value.
"I'm swamped with examples, from Enron to HIH, Adler and Walter Corp. These are constantly updated from current case studies. For example, the questions pertaining to CLERP 9 have varied with each iteration, culminating in the current law."
The evaluations are meant to be a warts n' all review, not an expose, to highlight areas of aptitude or further training opportunities.
The 130 questions are randomly chosen from a bank of another 500, and consist of mathematics and spelling tests, questions about ASX principles, the Sarbanes-Oxley Act and CLERP 9, providing an opportunity for the interviewees to give due diligence to profit and loss statements, cash flow reporting, balance sheet management and case study scenarios using local bungles.
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