A FTSE100 Deputy Company Secretary writes...
We are reviewing our Board skills matrix which has been in place for a number of years now. It would be helpful to understand the level of detail other companies go into in this area. Do your Directors self-evaluate? What scoring do you use? For instance, do you describe each skill and give an example of what you consider limited or strong experience – and ask your Directors to score themselves?
Historically, I have selected a long list of skills and experience that is relevant to our company and business model and then rated each director based on their CV and known inputs (rating either as ‘no experience’ ‘experience’ or ‘expert’) – then had the director check/challenge (which flushes out some hidden talents!) before putting the full matrix to the Nomination Committee for review/approval. This year, we used the Board Outlook tool which provides a deeper assessment of skills & experience – by each director completing a series of questions to qualify their experience. There is also a very helpful peer review process (where directors identify other Board members holding that experience and asking who they see as experts). The output was more robust that the original approach but (maybe unsurprisingly) was not materially different – so possibly time & effort for all and did not do much more than validate our original matrix. However, it is a good tool for those companies doing it for the first time/who don’t know where to start/how to iterate over time or where the CoSec does not have the relationships or exposure to assess the Board effectively/sense check the self-assessed output.
We asked for a self declaration from each Board member. In a FTSE 250, when I was there run also a short validation exercise for the table used in the Annual Report.