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ACCA Strategic Professional · Strategic Business Leader · The board of directors

Elmstead Bank is reviewing the induction and development of new non-executive directors after two new appointees admitted they did not understand the bank's risk exposures. Which measure best fits good practice for newly appointed directors?

A tailored induction covering the business, its risks and stakeholders, followed by ongoing training, is best practice. It equips non-executive directors to challenge management effectively. Leaving learning to chance, restricting access to management or inducting only executives would leave the knowledge gap unresolved.

  1. AA tailored induction covering the business, risks and stakeholders, with ongoing training to keep their skills up to dateCorrect
  2. BLeave learning to the individual since they were appointed for their experience
  3. CRestrict their access to management until after their first year
  4. DProvide induction only for executive directors

Explanation

Good practice expects a formal, tailored induction on the company's operations, risks, governance and key stakeholders, plus continuing development, so non-executives can challenge effectively. Leaving learning to individuals, limiting management access or inducting executives only would worsen the knowledge gap.

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