Toward a Requisite Board Competencies Matrix—Part Two

• Author: Axel Kravatzky
• Date: 01 May 2017
• Published date: 01 May 2017
• DOI: http://doi.org/10.1002/bl.30075

MAY–JUNE 2017 3

must have certain competences. Since

the collective work of the board is the

result of contribution and interaction

of individual board members, these

individual board members must have

certain competencies.

Pierce’s article was published before

director institutes and others developed

competency frameworks for directors.

Today, a number of such frameworks

exist and there are formal development

paths that directors can take to demon-

strate their qualification—for example,

Toward a Requisite Board

Competencies Matrix—

Part Two

by Axel Kravatzky

In the last issue of Board Leadership, Axel Kravatzky, PhD, examined the collective

and individual competencies needed by a board as well as advances in the design

and use of Board Competency matrices. In this second article, he looks in more

detail at denitions of competence versus competency.

Working with Individual

and Collective Competencies

The reason that all good governance

guidelines recommend that boards

be appropriately diverse is to ensure

that the board, as a collective, is able to

deal with the business coming before it.

First, what are we speaking about;

then, how do we measure and work it—

individually and collectively?

Definitions: Competence versus

Competency

Pierce pointed out in a seminal arti-

cle on competencies of future company

directors that there is an important dis-

tinction to be made between the words

competence and competency1:

• “Competence is concerned with

the performance of work in an

effective and efcient manner.

• Competency is a dimension of

management ability and behavior

required for a competent

performance to take place.

Thus, a job consists of a set of

deliverable outputs (competences)

that are likely to require associated

abilities (competencies).”

In other words, we can say that since

the board as a whole is the body that

acts and takes decisions, the board

must be capable of delivering a set of

outputs that are specific to the nature

of the organization and its context.

That means that the board as a whole

in the form of Chartered Director (C.Dir.)

qualifications. The defining characteristic

all these qualification paths share is that

director competence is demonstrated

through the requisite combination of

knowledge, skill, and experience.

The Caribbean Corporate Gover-

nance Institute’s (CCGI) Chartered

Director designation “means that a

Director or Executive has demonstrated

an internationally accepted level of com-

petence in the key areas of Governance,

Finance, Strategy and Leadership as it

pertains to Board performance.”2

The Institute of Directors in the

United Kingdom presents its compe-

tency framework as in Figure 1,3 while

the frameworks used for the Chartered

Director qualification in South Africa and

the Caribbean state that “the effective

combination of knowledge, skills and

experience underpinned by values is

what defines the behavior of a director

as competent.”4 In South Africa and the

Caribbean, the competency frameworks

are presented as those in Figure 2.2,4

Kiel et al (quoted in Australian Insti-

tute of Company Directors, 2016)5 talk

Figure 1: Director Competency Framework of IoD, UK

Source: Institute of Directors.3