Do you have what it takes to join a company board? If this is the career path you want to pursue, then you must have the right skills to help your board committee and the whole organization.
There are many skills that boards and chairs look for when appointing a new board member. Whilst some skills are required by the board, others are highly regarded, and having them will help you stand out from other candidates.
With that, let’s look at 11 crucial board member skills you need to foster if you want to be part of an organization’s board and reach success. But before that…
What Do Boards and Their Members Do?
What exactly is a board? And as a board member, what role do you play?
According to Schwarz, the expert in all things boards:
The role of a board and its members will vary to some degree by country, organization type, industry, compliance regulations, and the organizational charter. However, from my experience working with boards for more than a decade, there are several key roles common to most boards.
Here are the common roles he listed:
- The organization’s performance
- Financial management and reporting
- Management performance
- Risk management
- Reputation management
- Cultural and social impact
To add to Schwarz’s list, boards also deal with:
- Uncertainty in politics and the economy
- Fluctuations and economic downturns in the market
- Changes in regulations
- Rapid technological advancements
- Growing emphasis on transparency
- Concerns about cybersecurity
- Activism among investors
- Scrutiny from the media
The bottom line: The board is corporate governance that sets out to plan a company’s direction, supervise management, and safeguard the interests of both shareholders and stakeholders.
As you can see, being part of a board committee is a big responsibility. This is why there are essential skills that are highly needed.
11 Crucial Board Member Skills Needed for Boardroom Success
Say you want to become a board member of a certain organization (maybe it’s the company you’re already working in). Or, maybe you’re already part of board management and want to improve even more. Whatever the case, here are 11 crucial board member skills every board member needs:
- Strategic decision-making skills
- Analytical skills
- Accounting and financial literacy
- Business expertise
- Information Technology and Cybersecurity
- Networking Skills
- ESG skills
- Social skills
- Strong governance skills
- Bespoke skills
1. Strategic decision-making skills
This is certainly one of the top skills needed. As we saw, boards of directors need to make A LOT of important decisions. And it’s not just in one area, too.
This is why you need to master the skill of strategic decision-making. Not only that, you need to be able to make quick and decisive decisions in a challenging and high-pressure environment.
2. Analytical skills
An effective board can analyze data, identify patterns, and draw meaningful conclusions. In other words, current board members and future directors need great analytical skills. This set of skills refers to the ability to gather, interpret, and evaluate information.
This requires a mix of skills, including critical thinking, problem-solving, attention to detail, research, data analysis, and logical reasoning, to name a few.
The board of all people must know how to adapt – and adapt quickly. So if you want to be a great asset within the board, you need to be able to adapt to all kinds of changes in the industry, economy, technology, etc… This way, the board can quickly come up with new strategies that follow the current times and trends.
4. Accounting and financial literacy
Yes, the common board needs to know a thing or two about accounting and finance. This means you’ll have to be great at math. Talk about a range of skills needed!
But you might be asking, “Why do I need to know accounting and finance to become a board member candidate?” Well, board directors must also deal with an organization’s financial statements. This includes company interim and annual reports, income statements, cash flow statements, balance sheets, and statements of shareholder’s equity.
5. Business expertise
Want a board position in a certain organization? Then it’s essential to have a business mindset. Here’s how our expert Schwarz puts it:
At board level, this skill requires understanding various business scenarios and how to cope with them effectively. Directors with solid business acumen can better understand business issues, comprehend business operations, and provide quality insight on how to achieve goals successfully.
If you want to build a business mind, gain as many transferrable skills from your experience as an executive. If not, you can join entrepreneurship and startup workshops, business strategy and planning, corporate financial literacy workshops, and other workshops. You can also choose to get a certificate.
6. Information technology and cybersecurity
Cyber attacks are rapidly increasing. The Ponemon Institute’s State of Cybersecurity Report shows that 66% of businesses have faced a cyber attack in the last 12 months.
This is why cybersecurity knowledge and skills are a must among board members. They need to know how to act when an attack occurs.
More than that, they need to understand how a cyber attack affects the organization. This way, they’ll do what they can to avoid any of this happening.
As for information technology, being digital and social media savvy is not enough. You’ll need a deep understanding of future tech, such as artificial intelligence and machine learning.
7. Networking Skills
Besides all your skills, a board may look into your network before they bring you aboard. They’ll want to see if you can bring in potential partners, benefits, new resources, and outside information through your networks.
This is why networking is one of the relevant skills that you need. OK, you can still be part of the board if you don’t have many connections. But if you have a quality list of networks, then you’ll stand out among the other board member candidates. You’ll more likely be chosen to serve on the board.
8. ESG skills
ESG stands for Environmental, Social, and Governance. So ESG skills refer to the ability to understand, manage, and integrate considerations related to these three things. Since I have a separate section for social and governance skills, I’ll focus on the environment.
One of the board’s roles is to deal with an organization’s impact on the environment. This means they need to create sustainability, conservation, and minimal ecological footprint strategies.
To do that, they need great skills and knowledge related to this topic. I’m talking renewable energy, waste reduction, recycling, environmental impact assessment, carbon footprint measurement, eco-friendly design…
9. Social skills
As part of the board, you’ll be dealing with lots of different people. There are your fellow board members, management, and stakeholders.
During board meetings, social skills are vital for board function. It ensures that everyone can interact with each other and have stimulating conversations. You’ll be able to ask difficult questions and come up with insightful answers.
10. Strong governance skills
The board executive committee is like a sort of government for an organization. It’s no surprise then that strong governance skills are highly needed. This includes commitment to learning, crisis management, performance evaluation, stakeholder management, innovation, legal and compliance knowledge, etc… Now, the best way to gain governance skills is to get a Governance Qualification or learn from experience.
11. Bespoke skills
Get this: every board membership is different. Depending on the organization, industry, and challenges, you might have to acquire some bespoke skills not listed here. For instance, you might need several skills that are highly important to the industry.
For this, it’s best to ask the board members themselves what other skills you need to get in. If not, you can ask for help from headhunters or do deep research.
If you want to be part of a board in a certain organization, several crucial skills are required. If you excel in the 11 board member skills that I mentioned here, you’ll stand out and can get into your dream job. Here, you’ll use your skills and knowledge to help an organization succeed in all aspects.