Across the world, these events and trends disrupted boards’ ability to plan ahead and create long-term stakeholder value. Clearly, the need for effective and skilled directors has never been higher, especially in companies that need to rebuild or refocus their strategy.
So, as we get ready to close this demanding year, we decided to mine our platform data to find out what skills boards are looking for to effectively face the challenges in 2024. Our data is derived from almost 2,000 board reviews conducted on the BoardClic platform. It reflects the opinions of 5,000 chairs and directors in 500 boards of leading companies and organisations across Europe.
This time we’ve analysed responses to an open-ended question that is always included in our board evaluations: “In light of your current strategy, circumstances, and life-cycle stage, what skills or experience do you believe should be added to the board?”
The results clearly reveal what gaps boards believe they need to fill during 2024.
This is the most sought after skill in the boardroom next year, according to almost one-fourth (23.8%) of European board members. Industry expertise includes knowledge and experience from specific industries, sectors and markets. It’s by far the most desired skill and has been for as long as we have tracked this issue. Compared to the previous two years, we’ve reached an all-time-high.
Experience and knowledge of the industry in which an organisation operates is essential for a well-functioning board. But it’s also one of the most difficult skills to find. Individuals with deep industry knowledge are hard to recruit because of possible conflicts of interest (as they’re often already working for competitors). Interestingly, our data reveals that while top management always ask for directors with industry experience, some boards feel that adding this skill can make the board too operational and less strategic. Instead, they argue that these skills should sit outside the board.
The second most desired skill. At 13.8%, up 8 percentage points since 2022 after an all-time high of 15.6% in 2021. The increase in digital adoption and remote working since the pandemic is part of the explanation. Innovating in response to disruption may also have contributed by exposing organisations to cyber risks and AI technology. It’s crucial for boards to upskill in this rapidly evolving area in order to balance technology adoption and risk exposure—and to help their organisations to capitalise on its opportunities.
This skill was key in 2021 and most boards addressed this. At the time, many boards added directors with generalist digital knowledge. However, today, deeper knowledge and expertise is needed, especially when considering AI. At the same time, this competence has moved from the boardroom to now be an integral part of many management teams. Our data suggests that the ideal candidate is someone who has been part of or worked closely with a large-scale digital transformation project of the type that many global organisations undertook following the pandemic. AI is key in explaining the 8 percentage point increase, according to our data.
The third most skill that boards are looking for, with 6.3% of the responses.
There are two dimensions at play in this area; one is a desire to avoid having too homogenous composition when it comes to nationalities and the second is the need for relevant skills that support international expansion. Our data shows that many of our users are looking for skilled directors with experience in expanding companies in the US and Asia, mainly China. Sales & marketing ranked high last year (7.2%), as a reaction to the global economic downturn. Many boards prioritised upskilling in sales & marketing and this year’s advance for international experience is a response to that. Now the growth strategies are in place, it’s more about increasing knowledge and experience about international growth markets.
The decline compared to last year may seem surprising at first, given the coming increased requirements (CSRD etc).
We believe many boards focused on this last year. And not just boards, many organisations are now already upskilled in terms of ESG. Our data also shows that other priorities are currently considered more important than ESG—growth is key.
People & talent
A slight increase from last year.
People & talent is always present in our list of top responses but at the bottom end. Still, a top priority again for boards in 2024. Creating tomorrow’s leaders is a huge theme for boards, but the pressure of achieving short-term commercial targets often takes precedence over long-term business planning. So, it’s hard to motivate too much concern about people & talent. We believe the increase this year comes as a consequence of digitisation and AI.
Keep in mind that it takes time to form a board. When you want to raise the level of competence and skill, substituting one or two directors is best, even if you’re in a hurry. Plan carefully, think long-term. Having said that, be sure to regularly assess that your composition is right. What conditions or challenges are we seeking to meet or overcome, and will these change over the short or longer term?
We hope this list will inspire you to think about your board composition as you strive for the very best board for your unique situation.
About this research
Our data is derived from nearly 2,000 board reviews conducted on the BoardClic platform. The platform includes feedback from 5,000 board members across 500 organisations in 50 countries around the world.
This specific dataset, which focuses on the most desired skills and experience, is drawn from board reviews that took place on the platform between January 1, 2023, and November 8, 2023. It reflects the opinions and attitudes of 871 chairs and board members in listed companies, financial institutions, private equity and venture capital firms across Europe.
Talk to one of our experts today to discover how BoardClic can help you assess if your board has the right composition and skills needed for 2024.
11 January 2024
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