Does your Board have the right skill sets to add value?

Published 3rd June 2015 by David Reynolds I Davidson Executive

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Is your board adequately skilled and prepared to maintain a level of relevance and effectiveness for the future world of work?

This question is imperative for today’s work environment. An environment which is forever changing through technology, new competitors, legislative change or global trends.

Organisations also experience change as part of their journey and customer needs.

To keep relevant and effective, Boards must review the capability of its executive team and the competitiveness of its Board on a regular basis.

The purpose of such a review is to ensure the company has the right mix and level of skills to remain competitive, relevant and sustainable. The first step is to ask:

  • Do they have the right skills?
  • When did your Board last review the capability skills of its members?
  • Are the members providing a valuable contribution to the Board and the organisation?

Increasingly, I am observing the better functioning Boards are conducting regular reviews of their collective capability to manage risk and to ensure they are well positioned to deliver on their strategies.

The skill sets that appear to be more in demand these days, as compared to five years ago, include:

  • Marketing
  • Business development
  • Technology
  • Workforce planning
  • Digital marketing / social media

These skills are more pivotal and vital for an organisation’s survival and ongoing relevance than they were previously.

When recruiting new Directors, Boards should pay special attention to these skills and capabilities and target individuals with experience in these fields.

It goes without saying that it is not simply good enough to be experienced in these skills alone. Other skill sets are also needed for Directors to be effective. These include risk, commercial acumen, financial management and governance, to name a few.

The below table is a matrix of skills that I consider necessary when selecting Directors, as well as the tools and methods used to assess these.

Competency CV Review Behavioural Interview Psychometric Assessment Reference Checks
Relevant Sector Knowledge x x x
Commercial Acumen x x x x
Strategic Planning x x x x
Director Experience x x x
Problem Solving x x x
Negotiation x x x
Financial Skills x x x x
Legal x x x
Governance x x x
Risk Management x x x x
Human Resources x x x
Stakeholder Management x x x
Business Development x x x
Marketing x x x
Digital & Social media x x x
Property/Engineering x x x

Furthermore, the focus of Boards is evolving and changing.

An article ‘High performing boards: What’s on their agenda?’ (by Chinto Bhagot and Conor Kehoe and published in April 2014 in the McKinsey Quarterly report) indicated that Board members who have very high impact, change their focus depending on the risk and the environment. The areas that have the highest impact are strategy, performance management, investments, organisational health and talent management and business risk.

When next recruiting for new Directors, I would encourage Chairs to look beyond the traditional skill sets and supplement the Board with new directors who bring a different perspective to the Board and the organisation.

It could mean that you could have a 27-year-old digital expert as your next Director.

Now that brings a whole new, and exciting, set of dynamics to a Board!

David Reynolds is the Group Manager of Davidson Executive