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Balance of skills, knowledge and experience - Coggle Diagram
Balance of skills, knowledge and experience
The board and its committees should have a combination of skills, experience and knowledge
This issue can have an impact on the size of the board. Additional or replacement directors may be required to fill various skill or knowledge gaps on the board
Appointing directors who are able to make a positive contribution is one of the key elements of board effectiveness. Directors will be more likely to make good decisions and maximise the opportunities for the company's success if the right skillsets and a breadth of perspectives are present in the boardroom. NEDs should possess a range of critical skills of value to the board and relevant to the challenges and opportunities facing the company
Diversity in the boardroom can have a positive effect on the quality of decision making by reducing the risk of group think. With input from shareholders, boards need to decide which aspects of diversity are important in the context of the business and its needs
FRC guidance says that diversity of personal attributes is equally important. It suggests that the nomination committee should seek to ensure that the board is comprised of individuals who display a range of softer skills such as
Sources of intellect, critical assessment and judgement
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Many companies use skills and experience matrices including personality related version to help with cultural fit and completed a gap analysis of board requirements in order to achieve a better link to strategy and company culture
A skills matrix is a table that displays people's proficiency in specified skills, knowledge, competencies and aptitudes
It is likely a matrix will be prepared as part of an externally facilitated board evaluation, in such circumstances, the independed evaluator may come armed with a standard template of skills and aptitudes that could or should be evaluated
The nomination committee and chair should review whether that templates includes all the skills and attributes that they consider desirable in view of the company's current and future strategy
This process of determining what should be evaluated may in itself reveal immediate and obvious skill gaps. The process of actually evaluating the skills and attributes of the existing directors may simply reinforce this. The evaluation process is often conducted using an anonymous survey in which the directors are asked to evaluate both themselves and their peers
The CS/GP will probably be responsible for keeping the skills matrix up to date. This will probably be done as part of any internal annual board evaluation process and following any changes to the composition of the board
A skills gap analysis will compare what skills and aptitudes the board now has against what it needs either now or in the future. Eg a company coming to the market for the first time may decide that it needs to recruit one or more directors with previous listed company experience. Similarly, a company seeking to expand overseas might need a director with previous international business experience.