THE IDEAL BOARD CANDIDATE
More and more boards are identifying gaps in board skills and experiences. The consumer, market, technology, cyber and behavioural driven changes within the organisational landscape are putting greater scrutiny on the board’s short- and long-term strategic goals, performance, risk assessments and capacity to adapt.
Board member renewal, the skills matrix and appointment processes are also under scrutiny as they are an important element of the board governance framework. Boards are expected to have intellectual rigour drawing on a mix of functional expertise, industry experiences, qualifications and demographics for diverse business and governance perspectives on wide-ranging, complex current and future issues.
A recent Egon Zehnder article on the investor pressures faced by boards rightly points out: nominating committees must abandon old assumptions and rethink some of their implicit assumptions about what a board director should look like – which job titles are acceptable, what type of path defines a successful career and how well-known a director candidate should be to those already on the board.
This may mean selecting on potential and transferable skills. Some of the issues that the nominations committee and prospective candidates should consider include:
Is experience from the same industry mandatory or is greater value gained from someone who has capabilities with relevant types of customers, supply chain management issues, business models, competitor challenges, geographic reach, regulatory demands, transformation programs, market disruption or understands the ‘business of business.’
What strategic work is needed. Do we need a background in dealing with the systemic issues or strategic choices of an organisation at the same life cycle stage and can the new director help steer the organisation around the next few corners as the business keeps developing, diversifying, prioritising or refocusing.
How can we ensure decision-making is robust. What types of critical thinking, judgment, questioning and insight link to the board’s pressure points, willingness to continually improve or seek best practice.
Boards deal with ambiguity and complexity. Who can help us deal with the uncertainty or clarify alternative scenarios or navigate dual options.
What area of expertise or functional specialty is important to add a perspective to the matters likely to be raised on sub-committee or board agendas.
Who can help us get closer to our current and emerging customers or know the marketplace better.
What transformation or organisational change work is planned. Will success be improved with an understanding of people and culture or managing transitional impacts or having a view of the organisation as a connected system and how the levers of organisational capability interplay.
How useful is a skill-set in managing or influencing the interests of different stakeholders or resolving tensions across systems, organisation silos or groups.
Can we strengthen our board’s cognitive and demographic diversity.
How will we onboard, orientate and support the new board member, particularly a first time director, to avoid a false start and maximise their early contribution.
A combined board is stronger than any one individual and a board’s collective capability combines a range of individual skills, experiences and potential.
Board selection decisions come down to four factors: context, capability, motivation and fit. Yet, there are a range of issues that both the nominations committee and prospective candidates should consider when determining who is the ‘right’ director.
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