Competencies of your Board Members

Posted by Roxanne Chugg

A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organisation.

CEO’s constantly find it a challenge to get their Board members to be thinking and planning at the right level; to oversee the organisation’s activities rather than delving into the detail.

It can assist if Board members have a balanced set of competencies.  Board competencies incorporate desired skills, attributes and knowledge and consist of two components:-

  • Organisational competencies;
  • Individual competencies.

The competencies required to enable the organisation to succeed require the board to identify what competencies are needed for ‘business as usual’ and what competencies are needed to provide oversight of the strategic direction the board has identified.

1. Core Competencies

  • Ability to make informed decisions
  • Entrepreneurial
  • Can see wider picture and perspective
  • Integrity in personal and business dealings
  • Global experience/exposure
  • A personal commitment to the Vision, Mission and Values of the organisation

2. Personal Competencies

  • Acts on morals and values
  • Willing to act on and remain accountable for board decisions and focused on outcomes
  • High emotional intelligence
  • Able to be objective about what is best for the organisation
  • Has an independent mind and is inquisitive
  • Ability to act as a team player
  • Prepares well for board meetings – reads papers, seeks answers

3. Communication Competencies

  • Can articulate thoughts, opinions, rationales, and points in a clear, concise and logical manner
  • Is flexible and willing to change stances when necessary or appropriate
  • Has the ability to listen, process and understand key points
  • Can interact with other board members in a group setting, both contributing to, and valuing the contributions of all members
  • Recognises the motivations of a range  of stakeholders and communicates with them accordingly
  • Has the ability to relate to a wide range of people and establish quality relationships
  • Can influence and persuade others
  • Adds value to the board dialogue
  • Is able to focus at the governance level of issues
  • Is able to disagree without being disagreeable
  • Is competent and experienced in using technology e.g. Internet, email, using technology to minimise paper use
  • Culturally aware and has an understanding and appreciation of different cultural needs

4. Knowledge Competencies

  • Understands responsibilities as a Director
  • Aware of latest business and management practices
  • Understands the roles, processes and relationships of the board and its members
  • Knows the key performance indicators (KPI’s) of the company and its senior management
  • Understands legal, accounting, and regulatory requirements affecting the company
  • Keeps up to date developing knowledge and skills – reads widely
  • Has a knowledge of own limitations and is prepared to ask for help
  • Has governance experience

The above competencies should be present in every board member, and the following competencies should also be represented around the board table – not necessarily by every board member, but at least in some.

5. Strategic Competencies

  • Can see strengths and weaknesses of company, and how decisions will impact them
  • Ability to recognise opportunities and threats in specific industry
  • Ability to recognise wider business and societal changes, particularly in the context of global markets
  • Ensures strategies, budgets and business plans are compatible with vision and strategy
  • Aware of change and the need for change
  • Understands the difference between governance and management issues

6. Analytical Competencies

  • Can read and interpret financial reports
  • Ability to think critically and challenge proposals
  • Understand issues from different perspectives
  • Asks for and uses information to make informed judgements/assessments

7. Sector Competencies

  • Specific experience with the sector in which the organisation operates
  • Professional expertise in the sector in which the organisation operates
  • A deep understanding of the particular business model most effective in the sector

It’s good practice to conduct an annual competency assessment prior to calling for nominations (or appointments) for director vacancies. Then, when calling for nominations, the competencies which the board sees as gaps can be included in the desirable characteristics of a nominee.