Board members’ education is increasingly important and one of the key priorities for corporate boards of directors, according to Carlos Losada, an ESADE professor. During the presentation of the second edition of the ESADE-PwC Directors Programme held on ESADE’s Madrid campus, Losada also stressed that “this type of programme underscores the fundamental elements that every board member has to have engrained and, especially, provides them the keys to be able to overcome the challenges that companies face today, such as digitalisation, cybersecurity and sustainability.” Losada added that “there is a significant correlation between business results and the quality of board members’ education.”

Board member education

The presentation of the ESADE-PwC programme also served to learn about the primary conclusions from the  PwC report, “The governance divide. Boards and investors in a shifting world,” based on interviews with 800 board members in publicly-listed companies in the United States. The report highlights the gap between board members and shareholders in terms of determining the board members’ educational needs. The text indicates that, in the United States, “approximately 10% of board members feel that some of their members lack specific skills and knowledge.” In Spain, according to another PwC report, Consejos de administración de empresas cotizadas (“Boards of Directors in Publicly-listed Spanish Firms”), “48% of board members in publicly-listed companies in Spain feel that the members’ education is key”. Similarly, the areas of knowledge and experience that Spanish directors value the most are finance (62%) and the company’s specific industry (56%).

The areas in which board members expressly demand education include cybersecurity and digitalisation. ESADE professor and Programme Director, Carlos Losada, highlighted “the importance of board members’ education in the new business context,” emphasising the need to “re-think their education, understand the new demands that the current setting represents for them, provide them with the skills needed for dialogue within corporate governance bodies and, without doubt, refresh their knowledge.” According to Mario Lara, PwC Senior Advisor, “the disruption caused by new technologies and the emergence of new risks require specific knowledge which, oftentimes, is provided by external agents.”

Key challenges faced by boards of directors

For Ramón Abella, PwC Partner, his company’s report, “The governance divide. Boards and investors in a shifting world,” “provides a context that allows us to compare corporate governance trends in the United States and in Spain.” In his opinion, one of the aspects that concerns board members’ the most and which has the same priority in Spain is the boards’ renewal. According to Abella, “46% of board members feel that at least one of their members should be replaced” and that, “in this case, the primary promoters of this renewal should be the Board President and the Lead Director.” Abella also pointed out that “evaluating the board has increasingly become a fundamental means to take into account competencies, redefine committee structures and diversify board member profiles.” Another element highlighted in both country reports is the importance of board member diversity. In this regard, as Abella explained, “the majority of interviewees opt to foment diversity based on incorporating this variable when searching for new board members.”

For Mario Lara, PwC Senior Advisor, another difference worth noting between the two country-specific reports is the change in perception regarding reporting. It was previously seen as a type of compliance (accountability), though today it’s completely linked to the board member-shareholder relation. In this sense, Lara also underscored the notable presence of activist shareholders which, according to this study, “are growing and consolidating,” consequently becoming “key agents for boards.”

Other participants in the presentation of the ESADE-PwC Directors Programme included Enrique Verdeguer, Director of ESADE Madrid, and Rafael García de Diego, Secretary of the Board for Red Eléctrica de España.