Why Annual Training Often Fails Boards — and What to Do Instead

Corporate scandals and ethical missteps continue to dominate headlines, reminding us that governance failures often begin with a lack of board awareness and preparedness. Effective board governance requires more than oversight; it demands continuous education, ethical discernment and a deep understanding of compliance principles. Strong board training in ethics and compliance, governance structure and healthy board dynamics is no longer optional but rather is essential to maintaining trust and accountability.

As expectations rise for transparency, integrity and responsible leadership, especially among younger generations, boards must evolve accordingly. This shift underscores the importance of ongoing governance training in equipping directors and committee members, particularly those overseeing compliance and audit, with the knowledge and tools necessary to lead with confidence and integrity.

The DOJ’s September 2024 guidance highlights the critical role boards of directors play in overseeing corporate compliance programs, with the agency emphasizing the need for boards to possess or develop expertise in compliance-related matters. The guidance also highlights the importance of informed decision-making in compliance oversight, suggesting that boards with relevant expertise are better equipped to navigate regulatory complexities. 

Recent research published by the National Association of Corporate Directors (NACD) suggests that the skill sets of board members change quite slowly in part due to limitation of available board seats, finding talent or lack of board diversity.

Annual board training is a minimalist approach that leaves boards unprepared to deal with complex business scenarios that are brought to them. Integrating microlearning into regular meeting agendas ensures that subject-specific compliance training is ongoing, relevant and consistent, thereby sustaining organizational momentum.

Why continuous education strengthens board impact

Beyond the required compliance and code of conduct annual training, continuing education is pivotal and a strategic investment that should be clearly defined and outlined in annual board training and education plan to remind board members of their duties and empower them with the knowledge and resources to make sound and ethical decisions. It is the organization’s responsibility to educate boards and equip them accordingly.

Consider a board training plan and distribute key topics across four quarters, or as often as you meet with the board (or boards, depending on how your organization is structured), focusing on different strategic and operational areas throughout the year. You may also distribute key topics and develop a more dynamic training plan using a multi-year framework that evolves with time to meet the organization and board member needs (see sample plans here).

This training should be conducted either in-person or through live virtual sessions to enable real-time interaction. A blended training approach is ideal to allow for flexibility and accessibility based on locations and reporting structure.

Invite board members to compliance conferences to build relationships and learn together. This is an oft-missed opportunity for organizations that have an established budget. This training opportunity alone enhances board effectiveness and engagement with the compliance officer and allows for broader understanding of the need for compliance program governance at the board level.

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Regulatory, legal & ethical considerations when developing your training plan

Ensure training complies with state and federal regulations or requirements regarding boards. A few examples:

• California requires nonprofit boards to undergo sexual harassment prevention training and to be completed every two years; both Illinois and New Jersey mandate a variety of training for school board members; and many other states have industry-specific training requirements for board, management and employees.
• The IRS requires proof of good governance efforts (active and engaged board) in tax-exempt organizations’ 990 annual report.
• The National Credit Union Administration (NCUA) requires boards of federal credit unions to take financial literacy training within six months of being elected or appointed. 

In general, public company boards face more formal and stringent legally mandated training than private companies. This is due in part to the regulatory environment and accountability to stakeholders, which may require certain committees and disclosures. For private boards, training requirements are looser, as these boards are mostly guided by fiduciary duty and best practices.

Practical tips for board training

Here are a few tips for developing your board training materials:

• Use “we” instead of “you.”
• Instead of giving advice, pose questions.
• When asking questions, focus on the future more than the past
• At the beginning of meetings, ask if there is any conflict in the agenda that anyone would like to declare or recuse themselves from the discussion and vote.
• At the end of meetings, a few closing remarks can reinforce your focus on integrity:
  • Does this decision align with the organization’s core values?
  • Does this seem fair and consistent?
  • How does this affect our employees and the community at large? 
  • Are there other unexpected consequences we haven’t discussed?

Takeaways

By equipping boards with the right tools, training and frameworks, organizations can move beyond a check-the-box approach to governance and build a culture of genuine accountability that drives resilience and trust. Strong oversight not only mitigates risks but also positions the organization to seize opportunities with confidence.

A board training checklist like the one here could be a valuable tool and serve as talking points for compliance professionals when discussing board training with senior leadership before implementation; this resource will help you define the scope and secure overall buy-in needed to strengthen the organization’s compliance culture from the top down.

Ultimately, governance done well is not a burden; it’s a competitive advantage.