There is only one constant in the world – change. While some directors may have achieved successes in the boardroom with certain attributes, the endlessly changing world is now asserting demands for new attributes of future directors to meet tomorrow’s challenges.
- Eddie Chung
Partner, Tax & Advisory BDO
1. Strong values and ethicsWe live in an environment where communication is almost instantaneous and the world has a much lower tolerance for unethical behaviour. While having strong values and ethics should be innate within any director with personal integrity, the spotlight is quick to fall on directors whose values and behaviour are out of the step with community expectations of what is considered to be ethical and socially acceptable. Cultivating strong value-based ethics and culture in the boardroom is critical to ensure that your organisation does not end up on front page news – in a bad way.
2. High level of emotional intelligenceIn the past, businesses tended to focus on productivity and outcomes first. Humans came second. This position is now shifting. As businesses increasingly rely on technology and automation to deliver their goods and services, being human and aware of how others feel about your interaction with them have now become the prized commodity. Understanding other people, whether they are internal or external stakeholders, is an essential ingredient for collaborating with others and achieving mutual goals. A brute-force approach is now considered by many as counter-productive and out of step with modern practices.
3. Low egoAccording to Ryan Holiday, author of Ego is the Enemy, ego is the inner-voice that tells us we are better than we really are, which prevents us from having a direct and honest connection with the world around us.
In the boardroom, ego can adversely influence one’s views and decision-making and may result in a fundamental conflict of interest as it seeks to protect the ‘self’, while directors are required to protect the interests of the organisation they serve. Unless the ego is surrendered, sub-optimal decisions that are not necessarily in the interest of the organisation may continue to emerge from the boardroom.
4. High level of technical skillsMany organisations now embrace the skills-based board as a board composition approach, ie, each director is chosen for the boardroom because of the unique set of skills they possess. To serve the board well, the future director needs to have expertise in the skillset for which they are recruited, which requires not only education and professional qualifications – continued professional education and learning are indispensable to ensure that they remain useful to the organisation they serve. In contrast, technical complacency creates risks and leaves the organisation vulnerable to adverse changes in its environment where a strong technical response is required.
5. Broad generalist knowledgeWhile specific technical skills are non-negotiable, all directors around the board table should also have a good level of generalist knowledge of what is happening in the world around them and how their specific skillset is inter-connected with the wider world.
In David Epstein’s Range: Why Generalists Triumph in a Specialized World, the importance of being a generalist and the ability to identify patterns and nuances in the boardroom are well articulated: “Tactics are short combinations of moves that players use to get an immediate advantage on the board. When players study all those patterns, they are mastering tactics. Bigger-picture planning in chess – how to manage the little battles to win the war – is called strategy”.
And strategy is the primary domain of the board.
6. High degree of creativityEffective and innovative problem solving requires creativity. Otherwise, any solution conceived would lack imagination at best or be ineffective at worst. While creativity requires lateral thinking and is not shackled by ‘how things have always been done’, having the right tools to supplement your creativity drives innovation. These tools include a good understanding of technological trends and developments, especially during the current unprecedented era of digital transformation. Without creativity, the organisation you serve would constantly play second fiddle to emerging and leading competitors who are ground-breaking and agile.
7. Strong governance skillsCorporate governance does not come naturally to most people and needs to be learned. The Tricker’s model provides a good description of the board’s role in an organisation with which every director should familiarise before they join a board, in my view. Without a good understanding of corporate governance, a board has to expend significantly more time and energy in educating and re-directing directors from operational concerns back to a strategic focus at the expense of quality board discussions and decision-making. A board that is bogged down in operational detail renders it ineffective and causes frustrations to everyone around the board table.
In summary, to succeed in the boardroom, the future director needs to have a good mix of ‘hard’ and ‘soft’ skills devoid of ego. They need to be resourceful and adaptable, as well as have a strong sense of strategic direction to cogently lead the people and organisation they serve.