Do you have these boardroom skills?
THE boardroom has become a much more challenging place, and directors need to be skilled, capable and intelligent. Do you have these boardroom skills?
As the business landscape has become much more complex, non-executive directors are expected to do more than ever before.
Political and economic uncertainty, market volatility, regulatory changes, environmental, social, and governance (ESG) issues, rapid changes in technology, increased transparency, investor activism, and media scrutiny are challenges facing boards.
Non-executive directors are also more visible today and many are expected to commit more time and effort.
An average board meets six to nine times a year, but this number varies widely and does not include committee meetings, conference calls for urgent items or other ad hoc sessions.
Today, non-executive directors have to be more skilled and more engaged than ever before. Boards are refreshed quite frequently
Boards are refreshed to reflect the current and future requirements of the organisation or business. The limit for terms varies by country but is usually three terms of three years – nine years. In general, most directors serve more than one term as long as they contribute effectively. When a board ‘refreshes’ itself, it will usually do so to fill a knowledge and skills gap. For example, with the massive focus on environmental, social and governance (ESG), boards now actively seek people with ESG credentials and experience. The same applies to cybersecurity. And risk management expertise continues to remain in high demand around the world.
Imagination , curiosity and optimism
In the future, directors will bring imagination and curiosity to the boardroom. Most of their attention will be toward long-term, sustainable business models and innovative approaches to organisational culture and future risks. CEOs and chairs are also keenly aware of diversity as a factor rather than a skill when looking at their future board. Is their board diverse?
Does it represent their community, their customers and stakeholders? When it comes to board composition, diversity is crucial not just to tick off ‘diversity’ as an exercise but also to bring a broader perspective that can help predict challenges, manage risks, and optimise opportunities. Diversity also means new skills are needed, new generations should be represented, boards should be gender and ethnically diverse, and future thinkers should be welcomed. Some of the most in-demand boardroom skills are:
Digital skills
Being digital and social media savvy is not enough; the future director will need to understand how to use technology. The future of business will rely on artificial intelligence, machine learning, and data analytics. Also, cybersecurity has grown into a top-of-theagenda risk item. If you have cybersecurity skills you would make an attractive board member.
ESG skills
Many investors use environmental , social and governance factors to evaluate a company’s sustainability and ethical impact. Directors should embrace these factors and consider how they may impact a business. People with ESG skills, training and credentials are in high demand.
Positive future thinking skills
Directors and boards should be opportunity, rather than risk, focused. Directors should spend less time looking back on old data and more time on strategic planning for future success. What does the pipeline look like rather than what were the last quarter’s results? Also, what are the future risks to the organisation? Are they cultural? Are they technological? Are they related to talent?
Listening skills and emotional intelligence
Being a good listener is an essential behavioural skill for directors, while emotional intelligence is also in demand. No one wants a know-it-all loudmouth around the boardroom table. Being creative and possessing an innate curiosity are also critical skills for future directors.
Strong governance skills
Corporate governance is not something that most people are naturally adept at, and it requires learning. Without a comprehensive understanding of corporate governance , a board must spend a lot of time and energy re-directing directors away from operational issues and back to the strategic focus. This damages quality board discussions and decisions. When a board is bogged down in operational details, it becomes ineffective and causes frustration for everyone.
The future director needs a good mix of hard and soft skills (devoid of ego) to succeed in the boardroom. They should be resourceful, flexible, and have a strong sense of strategic direction to lead the people and the organisation in a meaningful way.
Dr. Proctor Nyemba is Certified Professional Director®-Pro.Dir specializing upon Governance and Strategy, Governance and Risk, Governance and People, Governance and Board Effectiveness, Governance and Resources, Governance Culture and Behaviour.
◆ Dr Proctor Nyemba helps board members and executives understand their role in governance so they can succeed in the boardroom.
For comments and feedback please send to boardroomtalk@icd.co.zw Call 0772469893