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The Actuary The magazine of the Institute & Faculty of Actuaries

Chartered director

Risk management has become a prime concern
for companies and their boards of directors. The Combined Code, incorporating the Turn-
bull recommendations, sets requirements for listed companies; the Financial Services Authority (FSA) approach to regulation will require banks and insurance companies to have adequate risk management processes in place.
Individual directors themselves face a riskier future, with the possibility of personal fines for those companies regulated by the FSA. Against this background the qualification chartered director, (CDir), recently introduced by the Institute of Directors (IoD), provides a professional status that will help directors meet these challenges.

Support for the initiative
After I retired, I had some free time which, after the priority of returning to serious chess-playing, I used to investigate the chartered director qualification. Not only did the designation create a means to further demonstrate my experience and integrity within any non-executive directorships I might take on, but also I considered that it was an initiative that merited support.
As Sir John Harvey Jones stressed in a chapter on non-executive directors in his book Making it happen, the role of a non-exec is important but not easy. In light of this, a growing number of directors, in both small and large companies, are undertaking the chartered director designation, with an increasing awareness of the need for their own professional development.

How it works
Chartered director status is a benefit for both the director and the company: the company gains added perspective and experience, and the individual can approach highlighted problems with a confidence in his or her professionalism. A key aspect is that the director can distinguish between that role and the one he or she carries out as a manager or executive.
The CDir qualification involves three stages. First, an exam covers five topics: the director’s role, finance, marketing, human resources, strategy, and improving business performance. This is followed by a review of the applicant’s professional background. Candidates must submit a self-evaluation form of their experience as a director. Lastly, a personal interview is undertaken with two senior members of the IoD.

CPD commitment
Following approval, candidates must adhere to the IoD’s code of professional conduct, which requires directors to serve the legitimate interests of the company’s shareholders, and must agree to commit themselves to at least 30 hours of further continuing professional development each year. Importantly, chartered status shows that the holder has invested time in winning the qualification, has acquired substantial knowledge in the process, and is committed to a code of conduct.

Chartered directors are known to inspire greater confidence in their companies’ banks, investors, suppliers, and customers by providing evidence that their board operates with high professional standards and integrity. Small companies that are more dependent on bank finance may see particular benefits.
I encourage other actuaries who are directors to look at the chartered director qualification. I look forward to seeing the benefit that the IoD Company Direction programme and the unique chartered director designation will bring throughout the corporate sector. As a non-executive director and a chartered director, I hope to make my contribution too.