In the ever-evolving landscape of corporate governance, the competencies of board members are crucial to steering organisations towards success and sustainability. The expectations for board members have expanded beyond traditional oversight to include a diversity of skills and an adaptive mindset.
Katri Sipilä from Deve Partners was speaking at the Prönö’s “Listed Company Boards in Finland 2023” Event and sharing her thoughts on the current trends.
The main skills Katri Sipilä listed in her presentation were:
Leadership and independence:
The most important thing a board member can offer is leadership with an outside perspective. It is the cornerstone of board member efficacy, characterized by a blend of independence and a strong moral compass. Personal integrity, along with ethical and professional conduct, are non-negotiable traits that define a board member’s capacity to guide and influence positively.
Strategic and big picture thinking:
The ability to discern the big picture, to get to the heart of an issue quickly by asking pertinent questions and to engage in strategic thinking is imperative. Board members must navigate complex business landscapes, envisioning long-term strategies that align with the organisation’s mission and the broader market environment.
Creativity and innovation:
In today’s fast-paced environment, creativity is a currency. Board members must bring fresh perspectives and innovative approaches to problem-solving, driving the organisation forward through transformative thinking and action.
Outward focus and representation:
Board members act as ambassadors, representing the organisation’s brand and values. An outward focus, coupled with the potential to serve as an effective spokesperson, enables board members to forge meaningful connections with stakeholders and the community at large.
Energy and commitment:
The enthusiasm with which board members approach their role is telling of their commitment. An energetic and dedicated board member can be a catalyst for motivation, driving the collective board and the organisation to achieve its goals.
Effective communication is a twofold pathway—listening and conveying. Board members must excel at both, being attentive listeners and articulate communicators. They must also be willing to challenge ideas constructively, fostering a culture of open dialogue and critical thinking.
The best board members are perpetual learners. They stay abreast of industry trends, governance best practices, and emerging risks, ensuring their knowledge is current and relevant.
Financial and numeracy skills:
A solid understanding of financial statements, budgeting, and financial planning is essential. Board members with strong financial acuity can provide insightful oversight and ensure fiscal responsibility.
Governance and compliance:
Knowledge of governance structures and compliance regulations is a must. Board members should ensure that the organisation adheres to legal standards and ethical practices.
Identifying, assessing, and mitigating risks are key responsibilities. Proficiency in risk management protects the organisation from potential pitfalls and enhances its resilience.
Technology, digital transformation and AI
With digital transformation reshaping industries, board members must be proficient in technology and AI. They should understand how digital tools and innovations can be leveraged for strategic advantage.
Industry insight and foresight:
Deep industry knowledge, coupled with foresight, is invaluable. Board members must be able to anticipate market shifts and guide the organisation accordingly.
A thorough understanding of commercial business management, sales, and marketing is advantageous. This insight informs strategic decisions that can stimulate growth and enhance profitability.
Human resources and communication:
Talent management and effective internal communication are vital. Board members must understand the value of human capital and advocate for practices that support a productive and positive organisational culture.
ESG and cybersecurity:
Expertise in environmental, social, and governance (ESG) factors, along with cybersecurity, are increasingly important. Board members should be proactive in addressing these critical areas that impact organisational sustainability and security.
With businesses operating on a global scale, international experience is a significant asset. Board members with a global outlook can navigate cross-cultural complexities and bring a wealth of diverse experiences to the table.
The role of a board member is multifaceted, demanding a blend of traditional skills and modern competencies. As guardians of corporate integrity and strategic direction, board members must embody these attributes to drive their organisations towards a prosperous and sustainable future.
There is no one specific type of person or set of qualifications that makes an individual the best fit for a board member role. Different organisations have different needs and priorities. It is all about people and team work within the board and cooperation with the CEO management team and other stakeholders. A diverse team is always best prepared for future challenges.
Katri Sipilä is an experienced CEO, lawyer, and professional board member. Currently working as a consultant, coach, and mentor in the Deve Partners network, she now focuses on helping owners, boards, and management to succeed, grow, and develop.
Deve Partners are inspired to work with leaders who want to create new business and achieve extraordinary performance. Their experienced multidisciplinary experts implement the changes together with you – smoothly and cost effectively.
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