The board must ensure that it has the right mix of competencies to meet the company’s evolving needs. Managing the process that encompasses succession planning, nomination and director recruitment is one of the board’s most important tasks. A nomination committee often performs the details of this task. Following are a series of points to consider when the board needs to recruit one or more new directors.
Having the appropriate mix of competencies for a board to undertake its role is seen as the most important requirement of a modern board. In short, a board without the mix of competencies required to fulfil its task is a board which is bound to fail. It should be noted that the term skill is used here interchangeably with the term competency, although technically competency is the more encompassing term. Figure 1 shows a framework covering the four major areas of board competency: industry, technical, governance and behavioural. Every board will require the appropriate mix of competencies in each of these four areas.
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