How effective is your board skills matrix? A checklist
26/07/2013
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Have you ever noticed that most board skills matrices look very similar? A typical matrix usually contains skills and attributes such as:

Skills, knowledge, experience

Director

1

2

3

3

5 (Etc.)

Industry knowledge

Finance & accounting skills

Legal skills

Marketing skills

Strategic thinking ability

Etc.

 

Whilst this approach appears simple and easy to use, it suffers from a number of problems.  If this reminds you of your own organisation’s board skills matrix (BSM), here is a checklist of the attributes your BSM should possess:

1.    The board BSM is explicitly and directly aligned to our strategic plan

2.    The BSM is explicitly linked to our vision and strategic priorities

3.    The BSM accounts for future potential scenarios, such as ‘Optimistic View’ (which could involve skills associated with acquisitions, expansion, new products/service lines etc.) or ‘Hard Times’ (which could involve skills needed to direct divestment, contraction, merger etc.)

4.    The BSM has been developed and tested against critical events that resulted in added or lost shareholder value

5.    The skills, experience, knowledge and personal attributes in the BSM are specific and relevant to your organisation’s needs, and are not broad and generic. For example, instead of specifying ‘legal skills’, it may be more useful to specify ‘legal skills – workplace law or health law’, for example.

6.    The BSM takes account of the skills needed to address major issues that our board is currently grappling with. This has been tested against a list of these critical issues

7.    The BSM’s development included a structured process for considering whether skills should be;

a.    Represented at board level

b.    Represented within management team

c.    Represented at both board and management level

d.    Purchased or brought in from outside.

8.    The BSM makes provision for the inclusion of the skills of prospective board candidates, as well as those of current directors

9.    The BSM includes the use of a rating scale to assess the depth of board members’ skills, and does not only record whether directors possess the skill

10.The BSM has enough rigour to respond to external stakeholder concerns regarding demographic characteristics, such as gender or age.

11.The BSM includes directors’ term expiration dates

12.The skills and attributes in the BSM exclude “generic givens”, such as “ability to assimilate and synthesise complex information” in favour of specific skills and experience relevant to business strategy

13.The BSM takes account of our board committee skill requirements

14.The nomination committee has reviewed the BSM with a high degree of rigour in the last 12 months.

15.The BSM has been subjected to a periodic (i.e. every 2 or 3 years) assessment by external advisers assisting in board and director performance reviews. The outside firm has a systemic, valid method not affected by the potential for board “group think”.

By using the checklist, you can transform your old board skills matrix into a powerful tool that will strengthen the performance of your board and ensure it is structured to deal with the challenges of the future.

© Guerdon Associates 2021
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