The press release is always the same.
John Smith has been appointed to the ABC Company board. He is a sitting or former CEO, CFO
All of this is, of course, relevant, necessary, and important to delineate. In fact, over the past decade or two, many of the improvements on corporate boards can be directly attributable to the evolution of boards made up of friends, former college roommates, and family members to those comprised of Directors who are there because of what they know rather than who they know.
However, these descriptions of skills and qualifications only paint part of the picture. They describe a set of tangible and mostly measurable experiences that are important to the board and the company it serves. However, what needs to be added to the specification of a director and the often nebulous board recruitment and decision-making process is reference to personality traits, values, and soft skills.
They may not belong in the press release or proxy statement. Still, qualities like leadership, analytical skills, and independent thinking are key and critical to the success of the board director. They inform the basis of their behavior in the boardroom and will facilitate progress and improvement, or not.
Written and verbal communication skills are also essential and perhaps assessed during the interview process, either deliberately or inadvertently. But what about decision-making capability or willingness to ask tough questions? Both abilities are core to the board’s work yet are often not methodically assessed when recruiting new directors. Most of the time, there is an awareness of the importance of these attributes. However, directors and those that help them recruit are less deliberate about ensuring that a particular candidate is skilled in these areas. Sometimes it is gauged during the interview and reference process, and frequently, it is expected to be present by virtue of experience. Often, it is assumed that the person will learn on the job!
There is some encouraging evidence that personal attributes are becoming more meaningful and influential in executive circles and the boardroom. Jane Fraser, Chief Executive Officer of Citi, has long advocated for the importance of empathy. In 2021 she wrote an article titled “Leading with Empathy: The Competitive Advantage.”1 She stated: “In this new age of disruption, where scale, agility, and a relentless focus on the needs of clients and customers are imperative for every business, empathy is the competitive advantage that will separate the winners from the losers.”
Hubert Joly, the former Chairman and CEO of Best Buy
Boards do indeed have many and ever-evolving challenges and concerns. However, imagine the rewards, benefits, and improvements that can be realized if all qualifications are considered when recruiting and evaluating board directors rather than only the tip of the iceberg. Yes, this requires a more comprehensive and complicated appraisal process, but the yield will be so worth it.