Board and committee’s skills matrix is a part of corporate governance process that usually is analysed on yearly basis.
Part of the yearly board evaluation is assessing the composition of the board and committees and the ability to support the strategy of the organisation.
The skills matrix update should consider the skills currently represented on the board and the skills a board may need to recruit to deliver on its strategy.
Members of a board can do two things to fill in skills gaps:
• Up-skill the existing board members through the board’s continuous professional development programme.
• Recruit new members – this process should be part of the succession planning and should involve replacing some members of the board with new members. The recruiting route is generally the more effective way to bring the new skills required, as a board needs experienced skills, not freshly educated ones.
There are general skills, that all members of the boards need to have, and specific skills, depending by the type of company.
General Skills
There are several core areas of expertise will be considered for all boards:
· core industry experience,
· senior executive experience,
· financial/audit and / or risk,
· experience in legal or compliance area,
· cyber security, and
· not the last, ESG.
Specific Skills
Specific skills depend on the industries particularities. Generally speaking, companies may be classified into five broad industry groups, each bringing specific skills:
- financial – capital market, M&A, financial services, marketing, corporate communication, customer service, and international markets skills should be considered
- industrial with specific skills as technical, engineering, health and safety, supply chain and manufacturing, marketing, corporate communication, customer service
- consumer – marketing, corporate communication, customer service, technical, engineering, health and safety, supply chain and manufacturing, and international markets skills should be considered
- healthcare where specific skills are health and safety, supply chain, corporate communication and manufacturing
- resources with specific skills as technical, engineering, health and safety, M&A and international markets.
Yearly boards evaluation processes are ongoing or completed for many listed companies: how many identified skills gaps and announced succession planning? How many members of the board recognize that they don’t have all necessary skills? How many members of the Board still needs printed documentation for meetings and ignore use of technology?