Strategy and needs
When putting a board together it is vital that all members are able to compliment each other’s skills. Appointing new directors is very similar to hiring a new manager; determine what gap currently exists, and then find the right person to fill such a gap.
Specialists and generalists
It is important to ensure that a board has as diverse a range of skills as possible. While it will be vital to have some specialists in finance, law and management, directors who have more of a general knowledge of the business world will play a vital role in boardroom discussions. The tough part is finding the right balance between the two groups!
Having identified the skills and expertise required, it’s important to think about the culture of the board and whether the candidate fits in in that respect as well. It’s one thing being impressive on paper, and quite another to fit into a particular group of directors.
A strong culture allows for better performance and will ensure that tough decisions are effectively worked through. It’s important that boards are able to test and challenge management's decisions and think independently.
Things to consider when putting a board together:
- don’t try to cover every single skill on the board
- strategy is the starting point
- who is appointed depends on what the company is trying to achieve
- focus on maximising value in the company.
“It’s not the rules and regulations. It’s the way people work together.” – Jeffrey A. Sonnenfeld, What Makes Great Boards Great
Turning a good board into a great board, is no easy feat and depends on a whole host of issues to happen.
Some things which makes great boards:
- a climate of trust and candour
- open communication flows
- well prepared and informed for board meetings
- a culture of open dissent
- a firm and fair chair
- an agreed strategy and a decent understanding of the core functions of the business
- a fluid portfolio of roles
- individual accountability.