The Art of Governance: Case studies, New Zealand.

‘The art of governance is a combination of principles, practice, people management, political know-how and sheer raw-cunning‘ (Denz, 2009, p.40).

The above quote taken from the Handbook for Aspiring Women Directors in New Zealand, possibly best encapsulates responses on the matter, offered by both male and female respondents interviewed for the study.

Each director in the sample study was asked to comment on the skill-sets, competencies and experiences they thought directors should possess. While the respondents identified a very wide range of key skills and qualities, they were all in consensus that every board member should possess strong financial skills and possess a well-developed understanding of governance-skills. All respondents stressed the importance of understanding the difference between management and governance. As a female director put it…

‘More women should ‘progress’ into senior management roles, then ‘leap’...’

While all male respondents spoken to, made the transition into governance via the CEO route, only two of the female respondents had transitioned onto substantive NZX boards following their appointments as CEOs. Eleven out of 15 female respondents had progressed to a director role, via senior management roles in their organizations. 

For three female respondents, the transition to large boards had been extreme after serving on smaller committees or subsidiary boards earlier. They said their progression to director membership, required different skill sets and a considerable amount of training.

The summary illuminates director skill-sets provided during the interviews. Each skill is briefly placed in context below the mentioned skill.

The summary shows how director skill-sets as perceived by the study sample  

DIRECTOR SKILL-SETS AND CONTEXT CLASSIFICATION

General Business Acumen

Industry /operational knowledge

Marketing 

Market forces - distribution

Finance and Accounting

Generating finance

Economics 

Markets –supply and demand

Legal expertise

Regulatory compliance

Entrepreneurship

SMEs, Trading, Agri-business

Risk management

Risk averse, changing economies

Governance understanding

Compliance, stakeholders

Hard business skills

Hard vs soft-skills debate

Strategic thinking

Big picture planning and organization

Industry knowledge

Knowledge of how business is run

Management

Managing people / CEO skills

Human Resource

Human Capital Successive Planning

Technical expertise

Information Systems /Technology

Diversity 

Diversity of competencies

 In the context of the skill-sets outlined above, the respondents placed important strategic emphasis on the requisite for directors to (i) know how the business is run (ii) know what forces impact on the industry, (iii) know what forces the organization must face in the future, and (iv) understand the infrastructure in which the organization operates.

In the analysis of the interview scripts, a few general themes emerged from the men and women in the sample. Some of the extracts quoted below demonstrate the boardroom skills respondents deemed important in effective governance roles. As one male director said… 

‘I would reject anyone trying to get onto a board if they did not have, either, CEO experience or, at least senior-level management skills. ‘Directors need to be good bull-shit detectors, demonstrate a clear code of ethic and be someone who will do the work, have a clear knowledge beyond the board they are on and be the right-fit for the board.’ ‘Women should join companies where they have economic value and can progress to senior management roles’ …

Overall, the female respondents found an easier place for soft-skills in the boardroom than the male respondents did. Not all the male respondents discounted the value of applying softer skills to a boardroom problem when it was required.

Conversely, a male respondent on an NZX company board said...

‘I never appoint a woman to a corporate board who does not have hard business skills. I am looking for hard business skills, not soft business skills. Not many women have the business acumen which is needed in the corporate boardroom’

The salience of influence and persuasion is also considered an important aspect of a director’s job. One female director on an NZX company board and former CEO suggests…

‘women directors should study governance cultures, models in other countries have good negotiation skills. ‘Having a legal background is a strong prerequisite for boardroom experience’ …  

Competencies: Data was also collected from the respondents to illuminate their personal competencies, that is, characteristics or traits, which could be associated as possible triggers to their career progression. Research shows that competency models differentiate superior performance from normal performance (Boyatzis, 1982). It has also been found that career progression results from superior performance and that those progressing to senior-level management and CEO positions are differentiated from non-managers, which supports the existence of certain ‘common’ traits or competencies associated with the behaviors of managers, CEOs and boardroom directors (Hofstede and McCrae, 2004)

The summary below, captures some of the key competencies found in both the male and female respondents, which appear to have contributed to career advancement at both senior-management and directorship level.

 The summary shows director competencies as expressed by the study sample.   

KEY COMPETENCIES

Left-brain vs right-brain focus

Negotiating skills,

Self-confidence, empathy, drive, energy

Good writing skills

Black/white outlook, helicopter focus

Thinking holistically

Softer skill focus, empathy, self-confidence

Dedicated approach

Results orientated, entrepreneurial

Flexible approach, self-awareness

Good communication skills

Determination, resilience

Learning/informal process of osmosis

Ability to innovate and listen 

Intelligence, life experience, independence

Fully committed and trustworthy

Knowledge of rules and laws

Strong values and principles

Clear understanding of ethics, integrity

Motivate and enhance others

Pragmatism, commitment, conviction

Like to measure myself with - best

Clear understanding of ethics, integrity

Motivate and enhance others

Pragmatism, bravery, commitment

Like to measure myself

Good work-life balance, ability to innovate

Avoid conflicts with others

Learn from adversity, courage, bravery

Energize others work-life balance

Share power freely, determination

Use `we more than I‘

Give compliments, eager to experience

Source: Compiled from interview transcripts. 

In a study by Dulewicz, and Herbert, (1996, 1999), they point out that ‘competency’ can be further examined for possible attribution to cultural, work environment or other biographical differences. They found at least 40 independent sets or clusters of competencies that emerged from their study analysis. Out of these 40 competencies, 31 could be grouped into 13 independent factors. - Isadore Campbell.