Is a governance qualification required for a board appointment?

One of the most common questions I get from aspiring NEDs is whether a governance qualification is required to get started or further their board careers. My answer is often the same. It is a good thing to do, but not having one rarely impacts your appointability.

What do boards require from candidates?

Having taken briefs from hundreds of Chairs of organisations wanting to appoint new NEDS, I know that regardless of the scope or scale of an organisation, they primarily look for 5 core criteria in successful board candidates:

1. Prior governance experience – having board-level experience;
2. An executive skill set – that is well articulated and  valuable at board level;
3. Connections, gravitas and industry experience;
4. Demonstrable passion – for what you do, what the organisation needs, or what the organisation does;
5. Cultural Fit – an ability to work effectively with the existing board, executive and Chair.

You will notice that whilst prior governance experience is desirable, having a formal governance qualification is not in the top five, despite what many might tell you. 

What are the statistics?

Only 15% of all board appointments are filled via formal routes (with recruiters or advertised vacancies involved). Of these, the majority of our most recent list of Australian and New Zealand board vacancies publicly referenced their desire for successful candidates to have a governance qualification – but digging a little deeper, not all suggested it was a ‘core criteria’ with others suggesting it was a ‘desirable criteria’ as a prerequisite for a successful board candidate. Regardless, you must remember that these vacancies represent only the formal applications, with 80%-90% filled informally, where governance qualifications are much less desirable. Further, a recent study of ASX 100 NEDs found that only 42% held formal governance qualifications. That means that 58% did not. 

So… should you invest in a governance qualification?

Long-time readers of my articles will know that gaining a board appointment is a very competitive process, with chairs wanting to appoint the ‘perfect’ board member. I have also noticed that having a formal Governance Qualification is becoming increasingly common among the people I work with – but it is still not a ‘must-have’ for board candidates.

You should consider gaining a governance qualification to be a bit like gaining an MBA. It is good to do. It will make you more effective in your role. The cohort you undertake the training with will likely be of value from a networking perspective. You will learn things you don’t know and have your existing knowledge reconfirmed. But alone, that qualification is unlikely to get you appointed. 

Having said that, I think there  are six reasons why a governance qualification is worth the investment:

1. It demonstrates your commitment to serving on a board and being a strong NED – it tells the decision-makers you are serious.
2. It is likely to teach you something new – regardless of your board experience.
3. It will formalise what you may already know – offering greater gravitas.
4. It may not get you appointed alone, but it will make you a more appointable candidate – separating you from others who don’t have governance qualifications.
5. You may access a network of aspiring and experienced board members through the training itself – these can be leveraged.
6. Your qualification can support your personal brand and non-executive board pitch – it is a nice way to finish.

And finally, a governance qualification suggests a commitment to being an effective board director. 

Further benefits of a governance qualification.

A governance qualification without the requisite experience or skills carries little weight in a competitive selection process. However, as a past board recruiter, I was often instructed by my clients to look for candidates with a governance qualification. I was asked to do so because a governance qualification helped de-risk your appointment, in the eyes of the decision-makers and the chair. You can read more about what a chair thinks and feels about appointing a new board member. 

But you must remember that this is primarily the case only in formal appointment processes, which make up a very small percentage of all board appointments made. 

In summary

When a Chair is deciding who receives an interview invitation, a formal governance qualification could be a tie-breaker between two otherwise equal candidates. Depending on the specific selection criteria, this credential can be the deciding factor in elevating your application from a “B” to an “A.” You can explore this competitive grading and shortlisting process here. 

There is a persistent myth that such qualifications are mandatory for board success. In reality, for the vast majority of roles, they have a negligible impact on your primary appointability. While it won’t be the sole reason you are appointed, it can certainly refine your skills as a Non-Executive Director, distinguish you from your peers, and potentially secure that initial conversation with the board. 

Very few directors I work with believe their qualifications were the singular key to their appointment. Even the most seasoned NEDs will tell you that while it is not a prerequisite for entry, it remains a worthwhile investment for those serious about a board appointment. 

In summary, do it because you want to be a better NED, not because you think it will get you a board appointment.

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