Why Directors Must Keep Learning – And Why the Law Should Require It

Continuous learning is the new normal. With AI, data, and constant disruption shaping every industry, staying updated is not optional; it is essential. Being on top of what is happening around you will not just keep you in the race but will be of immense use eventually. Professionals like accountants, doctors, and lawyers already face mandatory upskilling requirements. This week, I found myself wondering: why are company directors not held to the same standard?

Becoming a company director is no easy feat. It takes reputation, experience, and often a solid professional track record. With that position comes power—but also great responsibility. Yet, unlike many other professions, directors are not required to continuously upgrade their knowledge. Whether the directorship is rotational or permanent, that learning gap is concerning.

Corporate governance is something that should be held with the highest regard and that is possible only when directors come to terms more with what the world is and what it will become.

So why is it that corporate directors are not mandated to learn more? From what I understand, most directors’ upskilling programs are recommendatory and involve learning more about the companies they are part of. There may be odd cases where audit committee members may have to undergo programs that help them understand more on the audit and associated landscape. My point is that most director training/upskilling programs are board-driven and not regulator-driven. That needs to change.

The role of directors will be one of immense importance as we navigate this uncertain world. Here are some of the reasons why I think mandated director CPE hours make a lot of sense:

• Directors hold fiduciary and strategic responsibilities. These require a working knowledge of areas like law, finance, risk, ESG, AI, and corporate governance.

• Laws and standards are constantly evolving – cybersecurity, ethics around AI and climate risk disclosures are just a few areas where outdated knowledge can lead to major corporate missteps.

• Thought leadership matters – a well-informed board leads to better governance practices, reinforced accountability, reduced risk of non-compliance and crisis resilience. Broadening the knowledge base will be a win-win for both companies and directors alike.

A qualified accountant or a doctor or a lawyer is expected to upskill – there is no way they can lead their professions without it. Why should a company director overseeing millions (or billions) in assets face no such requirement? They hold such a hugely responsible position that being out of sync with knowledge is certainly not something that anyone would want. This is more so in case of listed or large private companies.

That does not mean ignoring the directors of smaller companies. A small company with directors who are constantly learning will be a big boon for them. Unless directors risk losing their spot if they do not learn, they will never be motivated to do so. Such a measure will shift boards from being honorary positions to real seats of knowledge and expertise – something that every company needs. Director knowledge in a corporate failure is often ignored – that should not be the case.

A Board should not be a puppet – it should have a strong presence, and its members should be subject to evaluation just like anybody else in a company. I understand that investors are building pressure on companies to appoint extremely competent boards with skill matrices that are best-in-class. Director performance and development should be one of the key areas a company has to address regularly.

Here is what I suggest:

• Mandated minimum hours of upskilling of directors – at least 15 hours per year and cumulative of 60 hours over a 5-year period.

• Pressurize the governments to bring in changes to existing corporate laws – director education and learning should be part of the law.

• Director salary to be linked to their skills and knowledge – incentivize them for upskilling.

• On the other hand, those who do not meet mandated hours would need to be disincentivized – reduce their sitting fees or salary.

• Regulatory bodies to create a curriculum for upskilling directors.

• Consider tie-ups with professional bodies for training, mentoring and upskilling directors.

In a world that is constantly on the churn, directors of companies have a huge role to play. And their roles can be discharged efficiently only if they understand more of the situation and broaden their horizons to absorb and understand areas outside their core expertise, to make informed decisions which they are expected to.

Directorships must evolve, and this evolution will be possible only if this significant blind spot is addressed. We need a springboard for much more beautiful standards of governance, fewer corporate failures and high standards overall – not just in select companies, but across the board. Directors have a key learning process to play in that.

It is time to stop hoping and start acting. Regulators, boards, and investors must recognize this learning gap and push for reforms. Better director education is not just a promising idea—it is essential for the future of sound corporate governance.

This article is intended for informational and thought leadership purposes only. It reflects the author’s views based on current knowledge and practices and should not be construed as legal or professional advice.