Great board members have certain special skills
Landing a position on a board is no longer all about industry expertise and financial savvy. What boards are seeking are leaders with strong social skills. The question is, why? Why have social skills, and soft skills like emotional intelligence, become so in demand?
According to an HBR analysis of nearly 7,000 job descriptions for c-suite and board roles, business operations are becoming more complex and tech-driven, the workforce is becoming more diverse, and companies face greater public scrutiny.
Consequently, leaders who are adept communicators, relationship builders, and people-oriented problem solvers are in high demand. These skills are now crucial to board success in the future.
In the past, it seemed simple
Back in the olden days, things were relatively simple for boards. Boardrooms were predominantly male, pale and stale. They were populated by former CEOs and industry-specific specialists or people with political connections.
Boards knew what to look for: somebody with technical expertise, superior administrative skills, and a track record of successfully managing financial resources.
When courting outside candidates to fill those roles, they often favoured executives from large companies or former political influencers.
And while this kind of board recruiting still goes on, what boards increasingly look for are people with softer skills.
Hard skills combined with soft skills
There is no one-size-fits-all solution for board composition, and qualifications and skills can be defined in a variety of ways, which further complicates the process. Having soft skills alone isn’t enough; you also need to be able to perform.
Currently, there is a trend for people with HR skills, audit skills, digital transformation skills, cybersecurity skills and ESG skills. However, this could change rapidly.
Who knows what the future will bring? Is climate change going to dominate board meetings over the next five years?
Five different types of intelligence
A recent study of boardroom skills, following interviews with 50 board members, found that boardroom capital is built on five different types of intelligence: financial, strategic, relational, role and cultural.
1: Financial: Understanding how to interpret an income statement is crucial in understanding the business: what’s going well and what’s not.
2: Strategic: Does the strategic thinking take into account key trends and external realities? How credible is the link between the strategy and the projected financials? Are we being honest about our competitors’ positions and competitive advantages?
3: Relational: Building successful relationships with other directors, company executives, and stakeholders is essential. Each of them brings different perspectives and experiences. Success depends on clearly communicating with others in the boardroom, where the pressure is high, and the egos are numerous, and on understanding what people are trying to say.
4: Role: Consider why you have been selected for the board and what you can contribute.
5: Cultural: Create an environment where executives are willing to be forthcoming, admit when things are not going well, and seek guidance from the board. A culture that demands execs be seen as successful, right, and doing everything well is inappropriate.
Social skills are emerging as vital skills
The boardroom door is opening up for many aspirants who never would have considered themselves before.
Traditional capabilities – such as managing financial and operational resources – remain highly relevant.
However, when boards search for leaders today, especially new NEDs, they take note of those capabilities and place a lot more emphasis on one quality: good social skills.
The term “social skills” refers to particular specific abilities, such as self-awareness, listening abilities, communication skills, and a capacity to infer what others are thinking and feeling. For CEOs, chairpeople, and non-executive directors, this shift is of particular significance.
With business evolving to navigate an increasingly complicated world, boards need to carefully consider their composition to ensure they have the right skills and experiences.