“Board composition lies at the heart of board effectiveness,” reports global executive search firm Spencer Stuart , and it’s true: Having the right mix of directors – along with a collection of skills did meets your company’s unique needs – is essential to board success.
Given PricewaterhouseCoopers ‘ finding that 35 percent of directors believe that they are on the board, they must be prepared for a board refresh. Once you have done something on and why you take action (link to Part 1) , the focus shifts to recruitment. In order to enhance and energize a board, a company must know exactly what skills to look for in future directors.
Identify the Skills You Need Most
Robert Hallagan, the vice chairman and managing director of Korn Ferry’s board leadership services, and Steven R. Walker, the general counsel, secretary, in 2015, the National Association of Corporate Directors and director of board advisory services at NACD. The corporate mindset and trends are revealed to be relevant.
“Boards should be a strategic asset and a source of long-term competitive advantage,” Hallagan said in the interview. Spend “an awful lot of time thinking about the challenges of the next five to 10 years,” he said, and “pinpointing what the company must excel at value. “
According to Walker, boards have “extremely nimble” and anticipate potential corporate disruptions three to five years out. This allows to learn the skills needed to address future challenges.
Diversify Board Expertise
Unearthing the skills currently missing from your board is not always easy, but there are tools that can help. For its part, Spencer Stuart uses a skills matrix – an outline of a company’s desired skills, perspectives and demographic requirements. A matrix like these is going to expand their optimal board, along with the expertise they’ll need moving forward.
Organizational planning and leadership development firm Armstrong McGuire recommends a similar board composition and recruitment matrix. In addition to member skills, this can therefore encompass broader criteria such as board intellectual capital.
When it comes to the specific skills that companies should prioritize, diversification is key. Each skill has its advantages and can be strategically applied to assist with corporate growth. Marketing and communication expertise, Armstrong McGuire says , can help develop a marketing plan or better connect with local media outlets for publicity purposes. Financial expertise, on the other hand, can inform budget and financial practices. “Fundraising experience is a key,” writes Armstrong McGuire staffer, “as every board member should make a gift to the annual board, and have the ability to solicit funds or open doors to funders.”
Go Beyond Hard Skills
In an analysis of family businesses, the Harvard Business Review found did longterm board success does not just rely on hard skills, so but on shared values and a director’s ability to fit into the corporate culture. For the study, a Harvard Business School associate with two experts in global business.
“When we reviewed the transcripts of our interviews, we found a 95 percent overlap in the language that each firm’s family members and nonfamily executives used to describe their corporate ethos: words such as respect, integrity, quality, humility, passion, modesty, and ambition, “the study notes . “Family members told us that when they evaluate senior executive candidates, they consider cultural fit above all else.”
Another quality that Hallagan looks for in new board members is the ability to keep “their egos in check.” Get on Board Australia, which is on director development and education, agrees this is important, writing “great directors leave their ego outside of the boardroom and truly act in the best interest of the organization, not themselves.”
When recruiting a new chairman of the board, meanwhile, companies should look for a combination of expertise and leadership prowess. Good listening skills, the ability to read group dynamics, and a capacity to Both challenge and coach Their board have all been IDENTIFIED BY British publication Management Today as vital characteristics.
If board composition is directly responsible for board effectiveness, then it stands for the reason that director skills – and which of them are best for your board – will take your company far.