Page 27 - Sept-2020-Issue

ARTICLE

Maintaining optimum level of Board Skills by filling the gaps succession planning and perfor-
through training, skill updation and induction of directors mance evaluation.
Specific gaps in skill/competencies on board and those of direc- It is suggested that for exist-
tors identified through skill assessment framework need to be filled ing CPSEs, PESB/DPE or other
through appropriate actions in the form of training, skill updation and government agency in associa-
appointment of new directors with desired skill attributes. This will tion with Board of directors of
ensure the board/directors possess the desired skill-set and these skills the listed CPSE and concerned
are being properly utilized towards shortand long-term objectives of Administrative Ministry can
the organization. carry out an exercise as to what
skill/expertise/competencies are
periodic review of skill/ competency assessment framework required by the board in the con-
Not only the skill assessment exercise should be carried out regularly text of its business of concerned
but there should also be periodic review of Skill/ competency assess- CPSE. For new CPSEs, such exer-
ment framework so as to promptly address future skill-sets require- cise can be carried out at the time
ments due to fast changing business and economic conditions.For ex- of initial categorization or list-
ample, a company focusing on expanding business by exploring new ing of CPSE. This will also help
export markets may decide that it needs a new director with global to understand the composition/
exposure having understanding of foreign markets and specialized structure of board required by
skills in global busines practices, cultures & regulatory frameworks. the concerned CPSEs represent-
ing required board skills vis-a-
vis actual composition of board.
Besides ensuring a skilled board
Board’s skills assessment exercise - flowchart and good governance, this will
also ensure appointment of direc-
1.1 establishment of Directors • Skill assessment for Board Level tors with required suitable skills
Committees
skill/ Competency/ expertise on the board of CPSEs.
assessment framework
• Identify overall skills/competencies/ 1.3 Complying seBi Disclosure To conclude, it would be proper
expertise for board requirements to quote Gyan Nagpal, talent
• Defining each skill/competency • Disclosure to be based on Skill strategist, that, 'We are entering
• Assigning competency levels Assessment Exercise
• Preparing Database of Directors' • General versus specific Board Skills a world, where the only legiti-
attributes mate borders for work are skill
Filling the gaps noticed during boundaries'. Current complex
1.2 assessing Directors' skills 1.4 skill assessment exercise and dynamic business environ-
through training, skill updation
• Plotting directors' attributes against and induction of directors ment, substantial involvement
idendified competencies of public money, objective of
• Self-evaluation by Directors w.r.t. value creation for shareholders
identified skills Periodic review of Skill/
• Preparing matrix of skills & Board/ 1.5 competency assessment and role of supervising the man-
NRC assessemnt of currently available framework agement in implementation of
vis-a-vis required Board skills
long-term strategy, demand that
the board of companies should
have an appropriate skill-sets,

government Companies Public Enterprises (DPE), but competence and expertise to
fulfill their fiduciary and statu-
and skill assessment the importance of a diverse and tory duties. As such, companies
exercise skilled Board of Directors for should establish a framework of
Though, it is right that the di- Government Companies can Director's Skill/ competency/ ex-
rectors in CPSEs are selected by hardly be over-emphasized. pertise Assessment to ensure that
Government of India follow- Further, Listed CPSEs are re- issues in board’s skill-set should
ing a well laid-down process quired to comply with the pro- be appropriately addressed. Su-
by Public Enterprise Selection visions of disclosure of matrix ch exercise of skill assessment is
Board (PESB)/ Department of of core skills of board/directors, equally important for succession
Contd to ...# 32

Kaleidoscope September, 2020 27