Sunday, November 24, 2013

A Competitive Board

A True Competency is based on 3As: Altitude, Aptitude, and Attitude. 

Competency is a composite of skills, ability, behavior, attitude and personality traits that identify successful Directors against defined roles within a company. The level of Board accomplishment may vary but the essential competencies will remain the same. 

More specifically, here are a few focal points for BoDs to keep competitive and accountable. 

Leadership Competency: Ability to probe issues in depth, disagree without being disagreeable, mentoring and be mentored, understanding risks, a functional skill, and promoting teamwork, relationship management are some of the other skill sets--- a balance of hard skills and soft skills. The effective functioning of a board depends on a number of factors, including the mix of knowledge and experience among the directors, the quality of information they receive and their ability to operate as a team. Broad experience in the same industry is not necessarily a requirement - Internal directors can help in that- Diversity in experience, industry, and situations are more important as a team. Governance, auditing, risk management, regulatory issues, mentoring and coaching, openness to communication are some of the areas of competencies though it may be contextual.

Strategic Competency: The ability to see the whole picture and relate it to the stated vision and goals. Vision & communication skills, analytic ability are a must. Great boards consist of independent directors who are “rowing together in the boat.” They see the development of strategy as a collective effort between themselves and management, rather than a question of “us versus them.” Management generates and shares ideas that stimulate debate among directors who are there to make positive, valuable contributions to strategy development, not just to provide a critique of the ideas they are presented with. Further, Board Directors need to understand the difference between being a Director and the Operator of the business. Directors need to be able to guide senior management team through effective questioning, coaching, advising, and assessment of the business strategy and the organization's execution. 

Skill Competency: Modern BoDs need to have both core competency and distinctive competency. Core competencies are those competencies that any successful Director will need to successfully rise through the Board organization. A distinctive or unique competency is a prized capability that has both the breadth in scope and the depth in expertise. Another way to keep a competency model succinct and focused on differentiators is to classify mission-critical competencies as either price-of-admission, something to select for, or a competitive skill that will most likely need to be developed. Such as:
1) Independent-mindedness 
2) The ability to see the big picture.
3) Willingness to ask difficult questions about strategy, leadership, and outcomes. 
4) Ability to make unbiased decisions
5). Willingness to act as a coach and advisor to the executive.
6) Vision & Communication & Innovation& Integrity
7) Measurable contributions in areas of problem-solving, innovation and introduction of new business opportunities

A competitive Board is upon that the Board as a whole needs to be able to create the holistic view. This implies that Boards of the future will need to work much more closely and collaboratively. Given the short amount of time they spend together, this may be one of the biggest challenges. Today and beyond, BoDs need to be global citizens with the ability to balance resources, risks, and consequences. Built on a foundation of integrity, welcome and embrace diverse thoughts, value those thoughts and behave accordingly.


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