by Stephen Conmy
The boardroom has become a much more challenging place, and directors need to be skilled, capable and intelligent. The good news is that boards now require a different type of skillset than they did even three years ago, so there are plenty of interesting opportunities for people with in-demand boardroom skills.
As the business landscape has become much more complex, non-executive and company directors are expected to do more, as board members, than ever before.
The challenges facing today’s boards are many and include:
Political and economic uncertainty
Market volatility and recession
Environmental, social, and governance (ESG) issues
Rapid changes in technology
Investor activism, and
Today, board members and non-executive directors have to be more skilled and more engaged and this means more opportunities for the right people. Boards are refreshed quite frequently
Boards are refreshed to reflect the current and future requirements of organisations. Even if you are a sitting board member it is a good idea to update your governance training and prepare for future director roles on a board. How long a person sits on a board varies by country but it is usually three terms of three years – nine years in total. 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 current focus on environmental, social and governance (ESG), boards now actively seek people with ESG credentials and experience. The same applies to cybersecurity. Risk management expertise continues to remain in high demand in boardrooms around the world as do expertise in human resources, digital transformation, finance, sales, mergers and acquisitions, startups and marketing.
How to become a director of a company
Becoming a board member, or company director, requires a similar approach to job hunting. You must prepare. Company director training or board member training is essential. Afterall, you don’t want to walk into a boardroom and not have a clue how boards operate and the roles of the various members and committees.
Director training is just one of the first steps to securing your first role on a board. It’s always good to research the sectors and companies that you find attractive. It is not a good idea to accept a role on a board in a sector that doesn’t interest you. Board members must bring more than just hard skills to their seat on a board. Soft skills are now in high demand by progressive boards and companies.
Directors must bring imagination and curiosity to the boardroom. Most of their attention should be on long-term, sustainable business models and innovative approaches to organisational culture as well as examining 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 means 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:
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-the-agenda risk item. If you have cybersecurity skills you would make an attractive board member.
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 governance training.
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 company 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.
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To access training and a qualification in corporate governance you can download the brochure for the Diploma in Corporate Governance.
Credit and thank you for content and article go to the Corporate Governance Institute and Stephen Conmy.