The technical talent challenge on the board

Selecting the people who will join the board of directors must be done with great care to ensure good corporate governance. Their personal background, including professional experience and level of education, will shape their perspective. Likewise, among the most crucial board members are the experts, whose level of expertise varies from person to person and must be clearly recognized to ensure fit.

First and foremost, it is important to clarify the role of the CEO on the board. In some cases, the CEO is also the chairman of the board. There are pros and cons to this arrangement. In many cases, the company’s founder is also the CEO and is considered an “expert.”

Those who favor having the CEO become chairman of the board argue that one study found no causal or statistical relationship between independent status and operating performance. Another study found that combining both positions can be highly favorable, while forcing separation can be detrimental to financial results and operating performance. Furthermore, no evidence was found to conclude that a technically inclined CEO would create an unfavorable situation as both CEO and board chairman.

Second, building a well-balanced board composition that includes technical experts requires specific considerations. The notion that “the more experts, the better” is merely a myth that should not be followed literally. This is because each individual possesses different levels of hard and soft skills. While hard skills are easy to measure, soft skills are not. It is important that board members’ level of knowledge and experience allow them to actively participate in every conversation.

Consider these 4 important elements when bringing technical experts onto the board. While soft skills are an important factor to consider, other factors will also affect overall performance, communication, and the interpersonal relationships among board members, the executive team, and shareholders.

First, rigidity of thought

The deeper a person’s technical expertise, the less flexible their thinking tends to become. For example, those with decades of technical experience tend to dismiss fresh ideas and struggle to think “outside the box.”

In today’s fast-paced and unpredictable economy, it is important to remain as flexible as possible while maintaining technical expertise. Otherwise, rigidity of thought can become a liability.

Second, overconfidence in their own expertise

Overconfidence can be recognized in several ways, including how someone handles other people’s ideas. It can also be seen in how they carry themselves. For example, what do they convey when answering questions?

Some people are skilled at projecting confidence even when their level of expertise doesn’t match it. On the other hand, there are also people who are less ambitious and therefore appear less confident, even though their level of expertise exceeds what they project. It is important to be aware of both types.

Third, excessive competitiveness in showcasing their own expertise

While a board may be composed of technical experts with different backgrounds, board meetings can be a good setting to detect competitiveness. Do they tend to dominate the meeting, or do they listen attentively and contribute when needed? Are they overbearing or humble? A director’s personal style must be critical enough to put issues on the table, yet humble enough to know how to leverage others’ contributions.

Fourth, a complicated communication style

Good communication solves half the problem. And by “good communication,” we mean more than having strong interpersonal and organizational skills. Technical expertise must be communicated in simple terms. Simplifying complex technical concepts is an art and a highly valuable skill for a board member. The right person can simplify conversations. The wrong person can complicate them.

In conclusion, building a balanced board should not be taken lightly. By carefully weighing these four factors, you should be able to select expert members who demonstrate flexibility, avoid overconfidence, refrain from excessive competitiveness, and communicate with clarity and precision.

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Jose Ruiz is CEO and Managing Partner of Alder Koten.