The Board Skills Matrix: An Essential Tool for Better Board Composition

 

Your board composition should constantly be evolving — whether that is the process of recruiting, nominating, and electing new directors or trustees or rising to meet long-term strategic challenges and opportunities. A board of directors is an organic part of your organization. Your board composition will need to grow, shed, and even recycle like any organic matter. So how do you know what parts are ready for growth and which need pruning? Developing a board skills matrix can help you map the strengths and weaknesses of your board composition. 

What Does Board Composition Depend On?

Healthy board composition is entirely dependent on the capacity of the members, director skills and qualifications, and the future goals of the organization. The term “board composition” covers everything from the people on the board to a list of desirable skill sets. 

Board composition is also influenced by the type of organization and its unique legal requirements. The makeup of a board can also depend on parameters like size, board terms, and the structure of shareholding and membership. Board composition can vary widely depending on the industry and future goals of an organization as well. 

A mix of veteran directors and first-time seat holders can help maintain balance in the composition of a board. Boards that have long-time members bring seasoned in-house knowledge. They can help organizations stay true to their goals, and serve as valuable insights into the success or failure of archived endeavors. A well-functioning board can make use of their existing director skills and qualifications while knowing when to bring in a fresh set of eyes. A Board skills matrix is helpful in evaluating when board composition needs a refresh. 

Director Skills Are Key to Better Board Composition

Before deciding where, how, and who to recruit, it’s vital to assess your current board members’ skills. As one director noted in a 2018 KPMG study, “Getting the right people with the right skills, both technically and personally, is as much an art as it is a science, but board composition can be far more systematic than simple guesswork.”

Taking this guesswork out of board composition will have a far-reaching impact. In that same KPMG survey, only 36% of directors said they were “satisfied,” and 49% were “somewhat satisfied” that their board had the right combination of skills, background, and experiences. Clearly, directors see much room for improvement when it comes to board composition.

Board Skills Matrix: How You Build the Right Board

So how do you assess what your board needs? How can you map the road to get there? Developing a board skills matrix can help you identify what is missing from your board composition and accomplish both. 

A board skills matrix can be especially helpful for nominating committees when they are tasked with voting to fill an empty seat. It can help them identify the gaps where the board might fall short in meeting their upcoming objectives.  

A board skills matrix is a grid that lists board members (or potential members) along one axis and necessary skills along the other axis. The two are cross-checked to map which directors possess various skills, usually marked with an “X” or checkmark. A board skills matrix is an easy place for a nominating committee to make notes on candidates. It is also a good tool to help define why a particular skill is necessary and what objectives it supports.

When setting up a board skills matrix, upcoming goals obviously need to be considered, but don’t forget to make note of things like demographics and networking connections. Adjacent assets are also important to consider. 

A board matrix can start with the following skills/experience: 

• Industry background 
• C-suite title 
• Risk management 
• Strategy 
• Marketing  
• Revenue operations 
• Technological 
• Governance 
• Additional resources 
• Network connections 

Boards should consider all these and add their own in order to make a board skills matrix that works well for their needs. 

Download This Free Board Skills Matrix Template

OnBoard has a board skills matrix available to download for free on its website. At a bare minimum, your current board’s skills assessment will help you know how to achieve the right mix of skills, backgrounds, experiences, and perspectives going forward. To maximize its usefulness, customize it, and align it as close as possible to your board’s strategic objectives.

There Is No ‘Right’ Board

Board composition is the essential heart of board effectiveness. Forward-looking and strategic-minded boards should continually consider whether they have the optimum composition that reflects their organization’s strategic priorities. The results and observations you obtain from assessing your board’s skills will not only help facilitate robust boardroom conversation around board composition, but it can provide insights as your board tackles the difficult challenge of building and maintaining the “right” board.

Of course, the quintessential truth is that there is no one “right” board – only the board that is right for your organization’s strategic goals. In light of issues such as a need for greater DEI (Diversity Equity and Inclusion), how to adapt to the long-term reality of COVID-19, and how to respond to ongoing pressure from third-party governance watchdogs, the demand for a broader set of skills to support organizational change in a fast-changing world have never been more apparent.

Use the tools, like skills tracking, already built into board management platforms like OnBoard to map where your board should go next. Housing all of your director’s qualifications, terms, and profiles in one place makes review time far easier.