- Posted by: admin
- Category: Events
At one time or another, you have probably been counseled about the need for a Skills
Analysis. If you were like many boards, you probably said, “Ok, thank you, we will look into
that.” From there, other priorities took over, and nothing meaningful happened. Other than
due to “a flawed memory and follow up,” the simple reason the idea was not pursued may
be a lack of a full understanding of what the Skills Analysis is, why it is important and how
it might work.
What Is a Skills Analysis?
Let’s take a shot at what this idea is and why it is important. Most people would say that a
skills analysis begins with asking the question, “If we had a perfect board, what would it
look like?” Then after you define that, then you simply ask the question, “How do we as
individuals and as a board, stack up against our own definition of perfection?” This is not
highly sophisticated thinking, it is the same thinking that a team coach goes through when
deciding on what she looks for when recruiting players. It is the same thinking you would
use when, as a leader of your own organization, you are trying to decide what the “boxes on
our organization” would look like if we had a world class organization.
But when you ask the question of “what we should look like?” that assumes that you know
what the perfect organization would need to be able to do in order to be world class. So, it
means that it is critical that we think about the role of the organization, the mission, vision
and values, even before we talk about skills. If you are a baseball coach, you know that your
mission is to prevent runs from being scored, and to put runs on the scoreboard for your
team. It might seem silly, but the simple failure to think about these core goals, might lead
to putting great hitters on the team, but failing to get great fielders as well.
In the governance role, we as directors need to be certain that we understand the mission,
vision and values of the organization, but we also need to know what our primary duties
and responsibilities are. Since a major aspect of our role is the oversight of organizational
strategy and operations, we are certainly much more interested in having a board that
understand the capabilities and competency of the Information Technology systems, than
we are somebody who is a superior computer programmer. Once we think about the core
role of the board, then we can focus on the knowledge, skills, experience and competency
we think would enable that “perfect board” to perform the role of governor.
One further thought on the concept of perfect. A few other terms that could replace that
word might be: ideal, preferred, desirable, useful, required or even a “wish list of skills.”
Whatever the term used, defining what we think would be a group of individuals who
would be highly competent at performing the board governance role, is the goal of this type
One added thought, earlier we used a variety of terms to define what is important. These
terms do take the Skills Analysis well past the word “skills.” We all know that knowledge,
skills, experience and competency all make up the ability to bring value to a discussion.
What board members know, know how to do, have had experience planning or doing, and
have a core competency at a meaningful level…all of these are important, and will define if
the board has the value added by that capability.
Why Do We Need It?
Almost every board member has at least once said, “We really need an expert in that area
on the board.” That statement alone could be the best evidence that a board should take a
hard look at doing a “skills analysis.” In any organization there are a variety of activities
that are performed by management, and many of those are subject to the oversight of the
board. If the board is not composed of individuals who have a range of capabilities that
provide for adequate governance and oversight, then the board is falling short of that
perfection or ideal we discussed. Worse still, if a capability does not exist, then the board is
exposed to fiduciary failure on its oversight role. The Duty of Care requires that the board
have the ability to “effectively” evaluate information and make prudent decisions.
In some areas, this may be obvious. Today, it may be hard to imagine that an Audit
Committee would not have at least one person who is truly a “financial expert,” yet, there
were times when boards simply never had such expertise. It is equally as difficult to
imagine that a technology-based business might not have at least one director who is
comfortable with Information technology architecture and deployment strategies; yet,
many boards today find themselves in exactly that position. Other areas may not be as
obvious until an issue arises on the board, and that, “We really need an expert…”
observation arises. The time to address these voids in capabilities, is before the need arises,
not after the “crisis arrives.”
Also, if we truly believe that the board should be a “strategic asset,” to the organization and
in particular to the CEO, then we should be certain that each member brings to the board
the kinds of capabilities that provide true value to the CEO and the entire management
team. Although the board role generally requires a liberal use of the art of inquiry; it is also
true that when a board has a range of competency, then the board can also be an invaluable
Some would say, “Look, we already know what we need, there is no reason to go through
some formal exercise.” And, that may well be the case, but, knowing it a gut level is not the
same as knowing and then developing a plan to satisfy the need. Further, all too many
board have added members for reasons that had nothing to do with capabilities, but rather,
because the person was a friend or professional colleague of one of the board members,
and they had a strong interest in the mission of the organization. Interest in the mission, or
even passion, may be a necessary condition for membership on the board, but that alone is
probably not a sufficient condition for bringing an individual onto the board.
Without a formal process of evaluating the board’s capabilities in light of the mission,
vision and values of the enterprise, the board runs the risk of making the mistake of putting
the effort to improve or refresh the board at a lower priority as the crush of daily oversight
drives out the strategic importance. Further, every board has prospect of member
departures; either from retirement, terms limits, changing professional situations,
geographic locations, etc. When these vacancies occur, is exactly the time when the value of
a formal skill analysis brings the greatest value. The process will inform the recruitment of
new members, and can help to both refresh and improve the composition of the board. In
short, with a departure, the board will know exactly what its priorities are. And will be
positioned to have the process of a search begin well before the departure occurs. A sound
recruitment plan, based on a desired composition and skills analysis, is far better than none
What Are The Steps To This Process?
This is not a complicated process. The suggested steps, given that the board has a
structured Governance process would be:
1. The Board Governance Committee, in communication with the CEO and the rest of
the board, can do a quick review of the Mission, Vision and Values to be certain that
the previously documented statement of these is still current. If not, then it would be
incumbent on the board to be certain that it updated those documents so that they
reflected the organizations current model.
2. The Governance Committee would then develop a draft document that outlines the
core skills that it believes reflects the most critical characteristics of the “ideal
board.” This would draw on its beliefs of the knowledge, skills, experience and
competency required on that specific board for that specific enterprise.
3. Once there is a committee consensus, then that list should be provided to the entire
board, with a request that the board members all provide their input on the list to
the Governance Committee.
4. In addition, at this time it makes sense that the entire board rate these skills in
importance. One suggestion might be four categories:
a. Essential Today
b. Desirable Today
c. Desirable Some day in the future
d. Not Required
5. Once these suggestions and rankings are received, the Governance Committee
should compile, analyze and develop a consensus recommendation back to the
board for approval.
6. Once the board develop a full consensus on the list, then the Governance Committee
should create a matrix of the skills agreed to along the vertical axis, and the names
of each board member on the top horizontal axis. Then it can take one of two
alternative courses of action:
a. The matrix is sent to each board member with a request that each individual
rate themselves on these skills(capabilities) on a scale of one (1) to ten (10).
Then, when the committee receives these back, it can compile the scores of
each to determine where the board