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Director Skills Review

Analysing the mix of skills, knowledge and experience of the board is an important part of reviewing its effectiveness. Effective Governance are leaders in establishing a robust director competency framework that can be used by boards to identify director skill gaps, ensure the skills of the current directors are being properly utilised and assessing potential directors to ensure their skills will complement those of the current directors and the needs of the board. Many boards have a simple skills matrix; however, shareholders/members and key stakeholders are demanding a more structured process to achieve a professional outcome.

The process for a Director Skills Analysis is as follows:

  1. The questionnaire is agreed by the chair or governance committee with any required industry skills being developed by Effective Governance.
  2. All directors complete an online questionnaire by providing their level of skill across a variety of competencies. These areas include behavioural, governance, technical and industry competencies. We also ask the directors to reflect on the board’s requirements for each competency.
  3. A report is generated and is the basis for a one-hour workshop, which is used to gain agreement on the requirements of the board across all skills, validate the self-assessment of the directors and discuss the impact of any director retirements on the board.
  4. Any changes from the workshop are integrated into the report. The report also includes a table which can be used for external distribution in compliance with the ASX Principles and APRA Prudential Standards regarding director skill disclosure and fit and proper requirements.
  5. If the board wants to recruit a new director, these results will be used in driving the Director Placement process.

Please feel free to contact us if you have any queries about the process or wish to arrange a Director Skills Analysis today.