What Makes Directors' Skills Unique?
The skills utilized by a member of the Board of Directors vary from the skills utilized in the operational pursuits of the organization. Clearly, the meta-oversight versus macro-operational reality is the root of the skill differentiation. Another element that contributes to this difference is the fundamental structure of governance. Boards operate as an egalitarian group, in a one-vote-per-member non-hierarchical structure. This is dramatically unlike the hierarchical pyramid structure of the operations-side of business. Another contributor to skill differences is the Robert’s Rules debated based, analytical communication format utilized by Boards. The figure below overviews some of the major skill differences between the two professionals.
This list leads to an obvious conclusion that a successful administrator may or may not fully succeed as a successful member of a board of directors. Experience has provided me with examples of people who are movers and shakers as administrators, but are devoid of the skills to work successfully as a member of a dynamic group. The result is that these people enact without the value of the voice of their fellow Board members. Such acts indicate a general lack of ability: to implement and to participate in a group debate; to understand board structure; and to thrive in the egalitarian reality known as Board work.
In general, here is a basic list of skills needed by all current members of the Board of Directors:
Financial Accounting and knowledge of basic Economics are pre-requisite for oversight of any organization. Boards must be able to place financial reports in context with current economic realities.
Analytical Skills and a natural desire to explore innovative possibilities attached to any given problem.
Debate Skills and an Understanding of Group Dynamics as the foundation of board work = plus a knowledge of Robert’s Rules of Order as the basic debate platform.
Research Skills to: (1) support an expansive comprehension of the local, state, domestic and global realities; (2) remain current in industry trends, (3) explore changing economic realities, and (4) research current and past market realities.
Problem-Solving Skills and application of a rigorous Decision-Making Methodologies.
Comprehensive Knowledge of HR and HRD as people are the greatest asset of any firm, Board members must understand the cost of turnover compared to competitors; RIO in training costs, training cycle times, and the legal and worker compensations risks the organization may face. Board should also explore the whistle blowing policies/procedures and annually review the organization’s HR manual/documents and succession plan.
