I’m a long-standing director of a not-for-profit board. We’ve just had an unexpected board member resignation and need to fill the spot quickly. We have a mix of elected and appointed positions and it seems like a maze, figuring out what skills we’re missing at pace. How do we proactively plan for these situations and what should we do in the short term? 

    The adage “act in haste, repent at leisure” certainly applies in the situation of selecting a replacement director to a board quickly.

    Don’t be in a hurry

    Never rush the selection of a director, as the inappropriate selection can take a long time to unwind. Even if the resignation of a director might cause a quorum not to be formed for a board meeting, there are short-term alternatives, including appointing an office-bearer (CEO, CFO or company secretary) or a former board member to the board for a defined short period while the board addresses the deficiency.

    Should you have a quorum, then we need to unpack the predicament. First of all, if it is an elected position or an appointed position, then both circumstances need to be treated the same. Too many times, boards allow the election of directors without having a skills-based input to the election process.

    No responsible member should elect a member to the board who does not have the skills/competencies required for the board to effectively govern. So how do you proactively plan to have a skills-based board?

    It takes time to establish, but once in place, this process will assist with director succession planning as well as induction. How many times have you joined a board and had only a brief bio of your fellow directors to ascertain the expertise at the table?

    An analysis of director competencies should consider four areas. 

    1. Behavioural factors including both personal and interpersonal competencies, which provide the platform for most work and governance roles. Some examples are common sense and sound judgement, enthusiasm and resilience, analytical decision-making ability and effective communication skills.

    2. Governance issues encompass financial literacy and strategic awareness, as well as risk- management orientation.

    3. Technical skills are also important, including legal, accounting and engineering abilities. Clearly, directors will not be strong in all areas. Specific technical skills, such as accounting or legal qualifications, are generally not a requirement for a majority of board members.

    4. Industry skills are essential for the board to understand the intricacies of the industry, such as the competitive environment, governance regulation, value-adding processes, the market and so on. A not-for-profit skills matrix should also include membership competencies.

    To establish the detailed competency/skills assessment, it is important that it is not a tick-and- flick process — “yes, I have accounting skills” — but an attribute-based competency assessment that each director assesses themselves against, and also provides input as to how many directors are required at the maximum level.

    The number of directors and the highest competency levels — as viewed by each director — are averaged and discussed with the board, then mapped against what competencies the board actually has. This will identify any competency gaps.

    The skills of the board are now easily identified — and the skills you are looking for are detailed by the attributes sought for the competency levels where there are gaps. The aggregation of these “gap” attributes makes up the position description of your director to recruit.

    Even with member-elected directors, those members nominated for the election process should have their skills clearly articulated — and how these skills fill any gap that the board might currently have or will have as a result of retiring elected members.

    The appointment of directors in haste — and not taking the time to plan a skills-based board — will leave you with directors who are inappropriate for your organisation’s board. 

    James Beck GAICD is the chair and director of a number of private companies and a facilitator of the AICD’s Boardroom Mastery course. 

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