CHARTERED MEMBER ASSESSMENT Candidate Handbook LEADING GOVERNANCE
2 CHARTERED MEMBER ASSESSMENT Candidate Handbook The Chartered Member Assessment is a key criterion for entry to the category of Chartered Member. This robust assessment provides assurance to the market that Chartered Members have met standards of knowledge and skill that support them to carry out their duties. Chartered Members and Chartered Fellows of the Institute of Directors make an annual declaration of good character and commit to continuing professional development and upholding the principles of the IoD Charter. The Chartered Member Assessment has two parts: a computer-based multi-choice exam (75 minutes) a 3,000 word assignment based on a case study (3 weeks to complete) Candidates must attain 70% or higher in both the exam and assignment to pass the assessment. Criteria In order to sit the assessment candidates must have completed the IoD Company Directors Course (CDC) or equivalent. Candidates are assessed on their knowledge and understanding of The Four Pillars of Governance Best Practice, and the content of the Company Directors Course. Fees The fees for the assessment are charged separately for each part. Examination: $295 incl GST, paid on registration Assignment: $295 incl GST, paid on registration Fees have been set to cover costs only, including design, development, delivery and marking. Completing the Assessment Candidates may complete the parts of the assessment in any order. Timeframe Candidates are required to complete both parts of the assessment within three months of either sitting the exam or receiving the assignment (whichever is first). Failure to do so will nullify the mark from the completed part. From the date of receipt of the case study for the assignment, candidates have three weeks to complete and submit their response. Results Exam results are communicated by email within 48 hours of sitting the exam. A results notice can then be accessed anytime by logging on to the exam portal. The IoD will communicate assignment results by email within four weeks of receiving your assignment. Where capacity becomes an issue you will be informed, and we will work to deliver your result to a mutually agreed timeframe. CPD points 5 CPD POINTS 5 CPD points are allocated to each part of the assessment. Points are not dependent on a pass mark.
CHARTERED MEMBER ASSESSMENT Candidate Handbook 3 The examination Topics Candidates have 75 minutes to answer 60 questions on the following topics: 1. Corporate governance Code of Practice Four Pillars of Governance Best Practice Companies Act Board structure Role of the chair Accountability 2. Finance Fundamentals (financial statements, reporting, accounting concepts) Compliance Monitoring financial performance Building business value 3. Law and compliance Law (legislation and directors duties) Compliance (delegations, policies and responsibilities to regulators) Best practice (records, proceedings and indemnities) 4. Risk governance Risk definition Risk appetite Director s role in protecting business value Risk culture No of questions 12 21 20 7 60 Sitting the exam The exam is delivered by Assessment Services Ltd (ASL) at 16 locations nationwide. Candidates sit invigilated exams in sessions including other ASL clients. The invigilator will provide individual instructions to candidates where required. Please see the IoD website, www.iod.org.nz for locations and dates. Each exam is randomly generated and the question bank has been designed so that every examination is unique. Questions are under regular review and the question bank is kept up to date with changes in legislation and reporting requirements. Candidates are not permitted to take any materials into the examination room. However, it is an open book exam and a clean copy of The Four Pillars of Governance Best Practice and a copy of the relevant sections of the Companies Act are provided. The finance section of the exam does not require complex mathematical analysis. A calculator is not needed to complete any part of the assessment. The exam requires you to answer a mix of multi-choice and multi-select questions. The interface also allows you to make a comment against individual questions during the course of the examination. The assignment The material provided for the assignment is a case study that includes: background on an organisation a set of board papers for the next meeting. Topics Candidates have three weeks to complete a 3,000 word response to five questions, covering the following topics: Topic Word guide % Strategy 750 25 Risk 450 15 Finance and legal 600 20 Board dynamics 750 25 Ethics 450 15 3000 100 Writing and submitting your assignment Candidates are asked to use their judgment and experience to prepare notes in the role of a director for an upcoming board meeting. Candidates are required to present a succinct argument. We are not testing ability to write prose, and encourage candidates to use bullet points and brief descriptions to clearly articulate a response. Formatting instructions are included with the questions. Please note all assignments must be submitted by email in a Word document. Assignments are marked to a schedule and moderated. The IoD applies a plagiarism prevention tool to ensure each submission is the work of its author. The case study Case studies are developed by approved writers to align in structure with the case study presented in the Company Directors Course. A new case study is introduced every six-eight months, and the questions attached to a case study are altered every six-eight weeks.
4 CHARTERED MEMBER ASSESSMENT Candidate Handbook Sample questions Your examination will consist of questions at a mix of levels. Some will be simple questions of knowledge and others will be more difficult. All the questions have a source reference in either The Four Pillars, the Company Directors Course content or the Companies Act. The questions below have been developed to illustrate the style of the questions in the exam. These questions are not included in the question bank and will not appear in an examination. Multi-choice and multi-select questions are written to include plausible distractors. These are answers that might look or seem right, but on close-reading of the question, are not. Sample multi-choice question Directors should consider resigning if they have: a. a continuing, unresolved, material conflict of interest b. any conflict of interest c. overlooked disclosing an immaterial conflict of interest Sample multi-select question You are required to select the two correct answers. Directors of listed companies may only disclose nonpublic information: a. with the authority of the board b. to a selected group of shareholders if the board and the law both permit the same disclosure c. if the same information goes to all shareholders d. when the annual and half-year results are released Answer: A and B Answer: A Both questions refer to the IoD Code of Practice for Directors, found in The Four Pillars of Governance Best Practice and online at www.iod.org.nz. Please note: in the examination the answer options are not assigned a number or a letter. Candidates click on the radio button of the correct answer/s. Study materials The Four Pillars of Governance Best Practice The Four Pillars is the IoD s comprehensive reference guide for directors in New Zealand and it is the key text on which the assessment is based. The Four Pillars blends high level principles in governance best practice with practical guidance on day to day directorship and an interpretation of legislation affecting directors. A clean copy of The Four Pillars will be provided at the examination centre. Companies Act 1993 Candidates are expected to have sound knowledge of the Companies Act 1993. In the exam you will be provided with the following sections as reference material: Part 8: Directors and their powers and duties, s.126 through s.159 Schedule 1: Proceedings at meetings of shareholders Schedule 3: Proceedings of the board of a company.
CHARTERED MEMBER ASSESSMENT Candidate Handbook 5 Assessment process Register your interest Login to www.iod.org.nz and register your interest via My Dashboard You will receive an email confirming your eligibility and with instructions for your next steps Book your exam and register for the assignment Book your exam via the online booking system from regular session times at 16 locations nationwide Register for the assignment Examination Sit the exam at the booked centre and time (instructions are sent with your booking confirmation) Candidates are notified of the result within 48 hours Assignment Assignments are couriered within 24 hours of registering You have 3 weeks to complete and submit by email Assignments are marked and moderated Results are notified within four weeks When both the assignment and exam have been marked, the IoD will notify you of your result. CPD points are awarded Pass If you have passed the CMA and you meet the other criteria, you can apply to upgrade to Chartered Member. Fail One examination resit and/or one assignment resubmission is permitted without Registrar approval.
6 CHARTERED MEMBER ASSESSMENT Candidate Handbook Resit, resubmit and review Examination feedback Candidates who attain 50-70% in the examination are provided with an Examination Feedback Statement, indicating the topic area(s) for which an incorrect answer was submitted. This is intended to assist failed candidates to target their preparation for a resit. Candidates who attain less than 50% are expected to fully revise the exam topics. Candidates who fail the assignment are provided with brief notes indicating areas for improvement. No feedback is provided to candidates who pass the assessment. Resit or resubmit option Candidates have one opportunity to resit the examination or resubmit the assignment (either or both parts as required). Examinations are randomly generated so the second examination will not be the same as the first. Resit/resubmit fees apply. Review If a candidate requires a review of the exam result or assignment, a fee will apply. Candidates must apply for a review within ten working days of release of the result for either exam or assignment. Review fees Examination: Assignment: $250 incl. GST $350 incl. GST In the event that any error is found or a question is determined to be deficient, the review fee will be refunded and the candidate s result adjusted accordingly. Examination reviews are conducted by an IoD subject matter expert. Review includes confirmation that the correct mark and result have been recorded, and all incorrectly answered questions are checked for accuracy and validity. Assignment reviews are conducted both by the original marker and an IoD marker or moderator who was not involved in assigning the initial mark. The assignment will be checked against the marking template. Becoming a Chartered Member Once you have passed the Chartered Member Assessment (CMA) you will be invited to complete an upgrade to Chartered Member form. At the time of applying to upgrade you need to be a member of the governing body of a qualifying organisation. A qualifying organisation must be an organisation in respect of which there is a meaningful separation of the executive function of the organisation from the oversight and governance function of the organisation. The size of the organisation doesn t matter as long as they have a separation between management and governance not-forprofit, school and trust board directors can all qualify. If you don t have a current board role, don t worry, the Chartered Member Assessment will never expire. We encourage members to sit the assessment following completion of the Company Directors Course whilst the content of the course and the experience is top of mind. You can complete the last step to upgrade to Chartered as soon as you obtain a directorship.
CHARTERED MEMBER ASSESSMENT Candidate Handbook 7 Preparing for the assessment When preparing for the assessment there are a number of things you should take into consideration. It takes about 30 hours of preparation on average to sit the exam and another 6-8 hours to prepare for and answer the assignment. Begin preparation about 3-4 weeks before you apply for the assessment by reading: The Four Pillars of Governance Best Practice Relevant sections of the Companies Act 1993 Your Company Directors Course workbooks and notes. You may also find it helpful to review: Finance Essentials course materials IoD directorsbriefs and other resource material Health and safety guidance Risk management articles. The exam: top tips Rather than memorising, think through the practical application of the information so it becomes more business as usual in terms of your governance roles. Remember that your own governance experience (both positive and negative) is a valuable source of research material colour your reading of the material with your own experience and knowledge. The multi-choice and multi-answer questions can be completed in any order. Watch for multiple correct answer questions they can be challenging. Remember to go back and check your answers before finally submitting. The assignment: top tips Don t get bogged down in details when analysing the board papers and focus on the material things that really matter. Don t get sucked into the red herrings and the many things wrong with the case study. Remember to put a governance hat on, not management. Check to make sure that your answer addresses all parts of the question. Use headings and other layouts, such as tables, to structure information. Keep within the word limit prescribed. A good answer may be quite succinct. Bullet points will save you on the word count. Go back to your responses a day after you have finished and do a final check before submitting.
January 2017 iod.org.nz Institute of Directors in New Zealand (Inc) Mezzanine Floor, 50 Customhouse Quay PO Box 25253, Wellington 6146 New Zealand Telephone: 04 499 0076 Email: cma@iod.org.nz LEADING GOVERNANCE