This is the first of a series of monthly articles that we, the Institute of Directors-Bermuda Branch, will be writing. This organisation is a branch of the London based Institute of Directors. In Bermuda we have 152 members and have grown rapidly in the past three years, as directors of all types of organisations recognise the heightened interest in the role they perform and the depth of their responsibility.

The Institute of Directors’ purpose is to support, develop and represent the interests of directors.

We provide professional development courses, leading to the designations of The Certificate in Company Direction, The Diploma in Company Direction and ultimately Chartered Director.

We also organise briefings, mostly in conjunction with KPMG, addressing topical issues of interest to directors and we host social events enabling directors to network with their peers.

Membership of the Institute also includes access to business consulting advice, tax advice and the prestigious premises of the IoD’s London headquarters in Pall Mall for business meetings.

Our articles in The Royal Gazette will deal with corporate governance in its broadest sense and whilst the main focus will be on the governance of companies, many of the principles will have equal application to the governance of charitable organisations, Government Boards, and sometimes even to the governance of the country, although we will stop short of making any recommendations on the latter as we have no wish to enter the political arena.

For the purposes of these articles we will, for the most part, use the definition created by a committee of the Toronto Stock Exchange in 1994. Corporate governance means the process and structure used to direct and manage the business affairs of the corporation with the objective of enhancing shareholder value, which includes ensuring the financial viability of the business. The process and structure define the division of power and establish mechanisms for achieving accountability among shareholders, the board of directors and management. The direction and management of the business should also take into account the impact on other shareholders such as employees, customers, suppliers and communities.

So you will see that when we speak of corporate governance, we mean something much broader than compliance. Indeed, good corporate governance can be viewed as ‘doing the right things as well as doing things right’, whereas, compliance is limited to ‘doing things right’.

Our articles will, therefore, in addition to addressing necessary areas of compliance, suggest ‘best practices’ that will, in accordance with the definition above, enhance shareholder value, taking into account the impact on other stakeholders.

We will explore, among other topics, the fundamentals of vision setting and its importance, board make-up and effectiveness, strategy creation and follow through, marketing, risk management, leadership, change management, and organisational culture with an emphasis on understanding it in the process of mergers and acquisitions.

We hope you will enjoy what we write and that you will find an application for our thoughts. If not, at least you will be better informed as you criticise the efforts of others!

Roger Gillett is chairman of the Institute of Directors — Bermuda.