Guideline for Board on New Director Orientation

Despite effective nomination process that delivers director with appropriate qualifications, the new Board member may not be able to dedicate full competencies for the company’s utmost benefits if the director lacks “readiness” or “confidence” to perform the roles. The Corporate Governance Code 2017, therefore, proposed that the Board ensure its new member get guidance and information useful in performing director’s roles. The Board should establish a clear policy to conduct “New Director Orientation” for every new director to help them adjust and build confidence in performing their roles at full potential.  

This guideline has been developed to reflect the significance of New Director Orientation, which will serve as “the first step” of director development process. Key Principles of this guideline are as follows:

1.    Responsibilities starts from the day shareholders appoint the “new director”. The Board should ensure the company has a mechanism to enhance readiness of the director in order to perform governance roles effectively.

2.    The Board should conduct “New Director Orientation”, a process to communicate and relay important and necessary information to newly appointed director, to give the new Board member adequate comprehension about relevant issues before performing roles as director.

3.    The Board should ensure that all new directors took part in the orientation, regardless of their previous directorship experiences, by established a clear policy in written. The orientation can be conducted in various forms, subject to appropriateness and qualifications of each director.

4.    The Board should recognize that New Director Orientation is “continuous process”, not “one-off” process. Therefore, the Board may consider a framework that divides New Director Orientation into three stages as follow:

4.1   Self-study stage -  In the period between the invitation to join the Board and official director appointment, the Board may primarily assign Corporate Secretary to present basic information to the person to create overview understanding about business type, business operation, relevant context as well as director’s roles and responsibilities.

4.2   Official orientation stage - The arrangement for the new director to meet with other personnel within the organization. The Chairman of the Board, Chairman of Nomination Committee (if any), and the Chief Executive Officer will act as key facilitators in discussing various issues in order to present relevant information, exchange views, and respond to queries of the new director.

4.3   Onboarding stage - To ensure the new director continuously develop knowledge, understand the Board’s function, and smoothly adjust to corporate culture, the Board may consider additional activities such as visits to various facilities or a tour of operations for new director to meet with personnel in various departments and learn more about the company’s business operations.

5.    The Board should review New Director Orientation program annually to ensure the activity yields utmost benefit and achieves its objectives. The review can be done by analyzing pros, cons, and obstacles from the previous orientation session while seeking ways for further improvement. 

6.    The Board should use the director’s qualifications, expertise, experiences, strengths and weaknesses observed during the orientation session as references in identifying gap which will then be integrated into individual director development plan afterwards.

For full "Guideline for Board on New Director Orientation" please download below