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Establishing and maintaining a skills-based board has become a proven corporate governance practice. It enables a board to comprise itself with the skills, expertise, experience, and other attributes considered important to the board maximising its value to the organisation and to improved organisation outcomes (whatever these are for each organisation, for profit or for purpose or for some other reason).
A common question that is asked when discussing a boards’ skills matrix is ‘what do we put in it?’. Closely followed by, ‘how do we measure and survey our board members?’, and lastly – but often forgotten – ‘how do we leverage our skills matrix for positive outcomes’?
This article answers these questions so that when it comes time to set, or refresh, your board’s skills matrix, it can become a comprehensive and meaningful tool to establish and maintain a board that delivers high value to the organisation, and it can have impacts and influence on other conversations aimed towards having the best (most effective, efficient, and committed) board for the organisation.
Setting up your skills matrix
What areas of expertise or experience do you put into your matrix?
There are several factors that influence or dictate what a board includes in its skills matrix. Although we use the term ‘skills’ matrix, the reality is that the best ‘skills’ matrices include a broad range of attributes, rather than just ‘skills’ that individuals bring to the board. We are much more than our area(s) of expertise. We come with inherent and developed traits, temperaments, and styles of working as well as professional specialities, networks, and other attributes. Smart boards realise this and reflect this reality through their board skills matrices. So, approach your thinking and conversation with a broad definition of ‘skills’ as you embark on a conversation about what attributes your board wants to see in its skills matrix.
As your board commences the conversation about its bench-strength, consider asking ‘What’s better at a board level? and ‘What may be better served at an executive/senior level?’. Your organisation may be at a stage where investment into an employee will be more valuable than bringing in a board member with a particular expertise.
The Strategic Plan
The organisation’s strategic plan is one of the first logical ports of call for an indication on the expertise, skillset, experience, and professional network considered valuable for your board members to have.
As a board, answer questions like: ‘Where is the organisation going?’, ‘What are the strategic ambitions of the organisation?’, and ‘What bench strength does our board need to support the achievement of its purpose and for the organisation to achieve its strategic goals?’
Given this strategic context, consider the role of the board at this moment in time and over the next 2-6 years (which is generally one to two terms of a board member).
BHP’s public Board Skills Matrix includes strategic focused attributes of Board Members, such as social value, community and stakeholder engagement to reflect the growing importance of ESG in the Boardroom. Source: BHP 2022 Annual Report, p 93.
Soft Skills and interpersonal Attributes
With organisation culture and the interpersonal/political nature of the boardroom, consider including ‘soft skills’ into your matrix. These are attributes such as emotional intelligence, empathy, integrity, and the ability to integrate well into a team. Including culturally relevant attributes desirable from the board members – those attributes that support the culture and behaviours desired in the boardroom and organisation.
Diversity Attributes
Diversity is an established and proven source of value for all teams, including Boards. Consider including diversity attributes on your matrix. This is a simple way to put your diversity ambitions front and centre, and as an active component of your board recruitment or refreshment strategy. Gender is one factor but think about other diversity characteristics that make sense for your board and organisation. Maybe age is important for you to consider on your board because your organisation serves a younger audience. Or perhaps bringing in a culturally and linguistically diverse individual will help your organisation deliver its message to a wider audience, or simply bring another dimension to the boardroom.
Although not part of their public Board Skills Matrix, CBA tracks various attributes of board members beyond skills and expertise. Source: CBA 2022 Annual Report, p 71.
Future-Focussed
Don’t just use what you know or what has traditionally been on skills matrices in the past. Look out to other boards’ skills matrices and what skillset / expertise is needed in your boardroom in the short to medium term future that you may not have even considered. For example, ESG or sustainability is becoming important for most organisations, maybe it’s time to bring that into your boardroom. Perhaps cybersecurity is ramping up in your industry. Or people and culture are a significant part of your business as you scale and expand into new locations.
Constitutionally Compliant
If you have constitutional requirements – like certain representatives or members who must be on the board – you may want to include these in your skills matrix, so you maintain oversight of these requirements.
Weigh it up
Taking your skills matrix a step further, your board may find value in weighting certain attributes higher than others. This may help to focus on the critical or mandatory attributes required or desired from board members. If you want to keep it simple, measure everything with the same weight.
Qualify each Attribute
Each board member may have a different definition of what each attribute means. It helps to provide a brief qualifying statement as to what each skill or attribute is referring to and also how to gauge or quantify experience against your skills matrix’s measures. For example, Wesfarmers qualifies their ‘leadership’ attribute as “Experience in a senior management position in a listed company, large or complex organisation or government body.”
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