Page 26 - Sept-2020-Issue

ARTICLE

Listing Regulations with regard the context of its business/sector and not all directors should possess
to matrix of core skills, expertise each of necessary skill/competency, which is also highly unlikely.
or competencies as required by It is expected that all directors should possess some basic general
the board of directors to function board skills to steer the company and specialized specific skills are
effectively are very important distributed among directors depending upon their qualification, ex-
for investors as it helps them to perience and expertise as illustrated below:
analyze, understand and satisfy
themselves about the diversity general Board skills which may be Specific Board Skills based on
of skills/expertise on the board possessed by all Directors competency/experience
adequate enough to guide and Industry knowledge/experience Technical/Operational Excellence
supervise the company towards
success. As such: Strategic thinking/orientation International Operations
• Disclosure/matrix should be Basic finance/accounts understanding Financial/Regulatory Expertise
based on a well-established Risk Management/oversight Advanced IT skills
system of skill/competency as- Independent judgement/Ethics/ Merger & Acquisition skills
sessment exercise rather than Team work
a half-hearted effort to som-
ehow fulfill the disclosure
requirements. • Most of the companies, in the area of core board skills. It is
• Some companies may be tempt- first year of disclosure have very likely that a genuine ex-
ed to disclose that all their di- shown that all the skills iden- ercise in skill assessment will
rectors possess all the skills/ tified by the board are avail- reveal skills/competencies need
expertise/competencies identi- able with directors and there to be strengthened to improve
fied by the board. It must be ap- is no gap in skill requirements. performance.
preciated that board as a whole One has to be careful, as it is • A disclosure format is given
must possess all the skill/exper- akin to saying that there is no below for reference and better
tise to function effectively in scope for improvement in the understanding:

BoarD sKill matriX sUmmarY (an illustration)

skill/expertise/Competency* name of the Director Whether Board skill is at desired
level or improvement needed
a B C D e
Industry knowledge/ experience     
Strategic thinking/ Orientation/Governance     
Financial Management/ Accounts /Audit  
Expertise
Required
Human Resources Management   Board Skill is
Technical/Operational/Commercial Excellence     available
Risk Management/ Oversight/Compliances    
International Operations/ Practices  
Independent judgement/Ethics/ Team work     
R&D & Innovation  Improvement Needed**
Advanced IT skills/ Cyber Security  Improvement Needed**

*The definition of each skill/competency can be given in next column
**The above format discloses that the company need to strengthen a) R&D and Innovation skills and b) Advanced IT/Cyber
Security skills.

26 KaleidOscope September, 2020