Page 23 - Sept-2020-Issue

ARTICLE

out performance evaluation of di- Desired skills for Board of or companies. Skills required on
rectors, a well-established system Directors the board of a company is af-
of identification and assessment The Board of Directors as a col- fected by a number of factors as
of skill-sets of board/ directors lective body should have com- given below and each board has
is of utmost importance, as it re- plementary skills/ competencies to identify and asses its own skill/
veals the individual & collec- appropriate to the type of busi- competency requirements.
tive skill gaps and paves way for ness/industry so that it can make - Nature and scale of operations
maximizing board performance timely and informed decisions. of company: Manufacturing or
by enhancement of required Broadly the skill-sets or compe- service, whether Government
skills. Such skill assessment ex- tencies required by the board can company, Sec 8 company; com-
ercise is also pre-requisite for suc- be categorized as under: plexity of business etc.
cession planning to identify and
develop/source suitable potential • Industry Knowledge/ Experie- - Nature of industry and busi-
board members so that continuity nce: Industry knowledge and ness environmental challenges.
in the board can be maintained Experience/Understanding of - Size & composition of board,
and board should have opti- applicable laws, regulations, number/type of Committees.
mum set of skills, competencies policies/Research & Develop- - Extant of delegation to execu-
and expertise at all times. It also ment and Innovation/Global tive management and their
helps to ensure a transparent and business practices/Governance capabilities.
robust process of appointment of structure. - Current financial/market posi-
directors. • Strategic expertise/ Governa- tion of the company with fu-
nce: Decision Making &
Statutory requirements to dis- Leadership skills/Future pro- ture prospects, key issues being
close Board Skills: As per SEBI spective - vision/ Strategic faced by the company currently.
(LODR) Regulations, 2015, all Orientation/ Value creation/ - International Operations spre-
listed companies are required Corporate Governance - Board ad and complexity.
to disclose in the Corporate procedures/ Sustainability. - Major stakeholders in the
Governance Section of their company.
Annual Report the list of core • Technical/Professional skills:
skills, expertise or competencies Accounting & Financial Mana- skill requirements of
as required by the board of di- gement/ Operational experi-
ence and expertise/ Human Directors under seBi
rectors to function effectively, in Resource/ Marketing/ IT skills loDr regulations (listing
the context of its business/sector, and understanding IT require-
and those actually available with ments of company. regulations), 2015 and
the board including the names of Companies act, 2013
directors who have such skills or • Personal skills/ behavioral Regulation 36(3) of Listing
expertise. competencies: Independent ju- Regulations provides that in
dgement/ Integrity and Ethics/ case of the appointment/re-
It is expected that this disclosure Team spirit/ Inter-personal re- appointment of a director, the
would help the shareholders to lationship/Curiosity and cour- shareholders must be provided
analyse and understand diverse age/ Instinct/ Mentor and active with a brief resume of the direc-
skill-sets required by the board to contributor. tor and nature of his expertise in
provide comprehensive guidance • Other Skills: Risk Management specific functional area. Rule 5
and direction to the company, and oversight skills/ Crisis re- of the Companies (Appointment
critical for its success vis-a-vis the sponse/Communication ski- and Qualification of Directors)
actual skills/competencies pos- lls/ culture building/ Merger Rules states that an independent
sessed by individual directors and Acquisition/Stakeholder director shall possess appropriate
and by board as a whole. This relationship. skills, experience and knowledge
would also make a director spe- in one or more fields of finance,
cifically responsible in the area of However, there is no universal list law, management, sales, market-
his/her expertise. of skills applicable for all boards ing, administration, research,

Kaleidoscope September, 2020 23