21 Mar The ‘Right’ Board Members
Regularly, there are articles regarding Board composition and the need to have the right skills on the board. There is a constant emphasis on recruiting the best, and most appropriate, board members as a high priority. It is often said that the failure to get the board composition and skills right can be one of the biggest risks for an organisation. The Board is key to driving the right tone from the top.
A recent article* within the Company Director magazine, focused on the need to develop a board skills matrix. Some of the key aspects of a matrix outlined within the article include:
- Strategy, Vision & Current Issues – knowing what knowledge, skills and competencies are needed to achieve them.
- Future Scenarios – looking beyond the current strategic plan, to what will be the next strategic leap
- Prioritise Requirements – using techniques and tools to identify the most important requirements
- Review Current Skills – identifying the gaps in current skills
- Review Directors – reviewing their skills versus the requirements
The Board needs to be able to step back and regularly evaluate its performance, and re-assess the boards risks. These risks may be grouped broadly into the good governance practices of the board; 1) Roles, Relationships and Conduct, 2) Advice, Strategic Direction and Decision Making, 3) Performance oversight and 4) Management of risk.
The Board needs to be very clear about its risk management oversight role, focusing on the organisation’s risk management process, system, and thinking. There needs to be an understanding of the key material risks faced by the organisation, and the adequacy of the organisation’s response to these risks. This requires board members to understand the underlying business. In addition to the board skills matrix, the organisation needs to ensure its orientation programme and ongoing training programmes for directors is sufficient to ensure Directors have the skills and competencies to understand the organisations business.
Riskwest is well positioned to assist boards understand the risks associated with the governance role and establish robust practices to maintain an adequate oversight of the organisation’s broader risk management processes.
* Company Director|Volume 29 Issue 11 |December 2013 – January 2014 Page 47 – Jane Stuchberry – Principal, Guerdon Associates