What can leaders aspiring to board roles do to prepare and position themselves for success?

In a recent report, Harvard Business Review conducted interviews with more than 50 board members representing some of the world’s leading companies. They found that boardroom capital is built on five different types of intelligence. Read on to understand why all are necessary and to think about how to improve in each area.

Five Types of Intelligence

Financial 
Can you talk in numbers, not just in words? 

“Directors cannot fulfill their fiduciary duties without being able to quickly draw an informed opinion on to the capital structure of the company; its financial gearing, the sustainability of cash flows, or its risk envelope. But this mandate doesn’t require you to have been a CFO or conducted an audit.” HBR comments. Rather than the technical aspects of accounting (which are also helpful), the interviews conclude that knowing enough to engage with the CFO, ask questions and hold them account are the skills required in this area. 
 

How to build this skill

HBR recommends obtaining responsibility for your own P&L, observe carefully how assets, investments, and leveraging combine to drive free cash flows (FCF) and listen online to earnings calls.
 

Strategic
Can you translate financials into strategy and back again? 

HBR identified four different ways that directors have pushed companies to understand, articulate, and measure sustainable value: economies of capital (financial markets), experience (employee and customer value propositions), reciprocity (who you do business with and how), and materiality (delivering what you say you are going to deliver). As well as the information in front of you, board members require a long-term vision that takes evolving business models and sector-specific strategies into account. Due to this, some organisations review have introduced strategic discussions into each board meetings instead of an annual strategic planning session. 

How to build this skill
The study suggests increasing your exposure to your firm’s business model, understand how it relates to your strategy and operations and how changes release (and potentially put at risk or destroy) economic value.

Relational
The role is to scrutinise, encourage, and advise, not operate. 

A successful working relationships with other directors, top executives and wider stakeholders is essential. Key to this is being able to clearly communicate with others, and understand what is being communicated to you, during times of high pressure. “Being effective involves listening carefully and being able to grasp, process, react positively, and adjust your thinking quickly to the direction of the conversation and to suggestions you may have not previously considered from peers.” HBR concludes. 
 

How to build this skill
Seek out opportunities to talk with and present to your board and pursue potential decision-making opportunities at the top of internal business units or in external roles. Watch and learn from those you consider expert. Ensure that you enable the success of others on your team and beyond.
 

Role
Board members must be clear on their contribution to the conversation. 

Ask yourself why you’ve been picked for the board and on which issues you can add the most value. As one experienced boardroom player explained, “We have eight meetings a year. You probably get the opportunity for one, or, if you’re really lucky, perhaps two questions per board meeting. That’s around 10 questions annually, so you need to make sure you think about what constitutes a material intervention.” 
 

How to build this skill

Focus on what role you have been chosen to play and where you add the most value. You can practice this in all your meetings and projects. Emulate others who bring that same precision to their work and interactions.

Cultural
Creating the right environment is a big part of getting the best out of an organisation. 

According to one interviewee, the duty of the board is “to create an environment where the executives feel willing to be forthcoming, to admit if something is not going so well, and to seek the board’s advice and guidance on how to fix it. It is inappropriate to foster an environment where the execs have to be seen as successful and right and that everything is going great when that is not always the case.” The findings show that transparency, trust, and rapport flows from careful preparation and orchestration, an ability to quickly evaluate and understand the culture of a group and, if it needs improvement, to develop a plan for finding allies and slowly steering the group toward change. 
 

How to build this skill

Work on your ability to read, get along with, and improve the culture of diverse groups of peers by joining cross-functional, cross-industry, and cross-culture groups.

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