The NED skills matrix: building a board that fits the strategy

Most boards have a skills matrix. Far fewer have one that changes a decision. Too often it is a compliance exhibit in the annual report, filled in by the directors themselves and rarely revisited. Built properly, it becomes the most practical tool a chair and a nomination committee have: a shared view of what the board needs to deliver the strategy, what it already has, and what the next non-executive director must bring.

Start from the strategy, not from a list of competencies

The common mistake is to begin with a generic template: finance, legal, risk, marketing, digital, HR. Every board ends up with roughly the same rows, and the matrix describes a well-rounded board in the abstract rather than the board this company needs.

A useful matrix starts with a different question: what will this board have to decide, challenge and oversee over the next three to five years? A company preparing an international expansion, a regulated business facing a new supervisory regime, a PE-backed platform pursuing buy-and-build and a family group preparing a generational transition need very different boards, even if they operate in the same sector.

In practice, the chair should translate the strategic plan into a short list of board-level challenges, then into the capabilities required to govern them. Typical examples:

• entering two or three new geographies through acquisitions;
• moving from founder-led to professional management;
• preparing for a listing or a sale within a defined horizon;
• a material shift in the business model, such as from product to recurring services;
• a heavier regulatory or sustainability reporting burden.

Each of these becomes a row in the matrix. The generic competencies still matter, but they sit underneath the strategic ones rather than replacing them.

Skills, experience and attributes are not the same thing

A matrix that mixes these three categories produces confused scoring. It helps to separate them.

• Skills are capabilities a director can apply in the boardroom: reading a capital structure, challenging an M&A case, overseeing a cyber-risk programme.
• Experience is what a director has lived through: running a business through a downturn, sitting on a listed board, integrating an acquisition, operating in a given market.
• Attributes are behavioural: independence of mind, willingness to challenge, judgement under pressure, the ability to work as part of a collective rather than as an individual expert.

Skills and experience can be scored in the matrix. Attributes are better assessed through the board evaluation and through referencing. Putting “integrity” or “strategic thinking” in a grid and asking every director to score themselves produces a column of top marks and no information.

The dimensions that matter

Once the strategic challenges are clear, most useful matrices cover five dimensions.

• Sector: deep knowledge of the core industry and of adjacent sectors the strategy is moving towards.
• Functional: finance and audit, risk, technology, people and remuneration, commercial and customer.
• Geographic: real operating experience in the markets that matter for growth, not merely having visited them.
• Governance: prior board experience, committee chairing, listed or PE-backed environments, regulator and shareholder relations.
• Transformation: having led or overseen change of the kind the company faces: acquisitions and integration, digital shifts, restructuring, succession.

Twelve to fifteen rows are usually enough. A matrix with forty rows is a sign that nobody has decided what really matters.

Scoring the current board honestly

Self-assessment is the weakest point of most matrices. Directors are rarely dishonest, but they are human: they score themselves on what they understand, not on what they could lead or challenge at board level. The result is inflation, and gaps that should be visible disappear.

Three disciplines make the scoring more reliable:

• Define each level in observable terms. “Strong” should mean that the director has held direct executive or board responsibility for that area and could lead the board’s discussion on it. “Some” means working exposure. “None” means none.
• Have the chair or an independent reviewer calibrate the scores. Self-assessment can be the starting point, but the final grid should be moderated, ideally in individual conversations.
• Score against the need, not in the abstract. Having been a CFO does not automatically mean strong capability in overseeing an acquisition programme in a new region.

A skills matrix where every director is strong at everything is not a matrix. It is a reassurance exercise.

An example matrix

The table below illustrates a five-director board of a mid-sized industrial group whose strategy is international growth through acquisitions and a shift towards services. ● indicates strong capability, ◐ some, ○ none. The final column states how critical each capability is for the strategy over the next three to five years.

Capability	Director A	Director B	Director C	Director D	Director E	Need for strategy
Core sector knowledge	●	●	◐	○	●	High
Recurring services business models	○	◐	○	◐	○	High
M&A and post-merger integration	◐	○	●	○	◐	High
Finance, audit and capital structure	○	○	●	◐	○	High
Operating experience in North America	○	○	◐	○	○	High
Technology and cyber risk	○	◐	○	●	○	Medium
People, culture and remuneration	●	◐	○	◐	◐	Medium
Listed or PE-backed board experience	●	○	●	○	◐	Medium
Sustainability and regulatory reporting	○	○	◐	○	◐	Medium

Read this way, the matrix tells a clear story. The board is well covered on sector knowledge and has one strong finance and M&A voice, but it has no real depth in recurring services models and almost no operating experience in the region where most acquisitions will happen. Those two gaps, both rated high, define the next appointment far more precisely than a request for “an experienced independent director”.

From gaps to a NED search brief

The value of the matrix lies in what it produces: a search brief for the next non-executive director that is specific, defensible and agreed by the whole board. A good brief states:

• the one or two capabilities the appointment must bring, ranked;
• the experience that would demonstrate them, such as having run a services business of comparable scale, or operated in the target region;
• the governance role expected, for example chairing a committee within a defined period;
• the attributes the board needs, given its current dynamics;
• what is desirable but not essential, so the field is not narrowed unnecessarily.

A single appointment rarely closes every gap. The matrix helps the board sequence its renewal over several years, aligned with director tenures and planned departures.

Independence and diversity of thought

Corporate governance codes across Europe expect a significant proportion of independent directors and increasingly ask boards to explain how their composition reflects the strategy. The matrix supports both: it shows that each independent director brings something specific, and it makes visible whether the board thinks in the same way.

Diversity of background, gender, nationality and career path matters because boards that recruit from the same networks tend to share the same blind spots. The matrix will not solve this on its own, but a brief that starts from capabilities rather than from familiar profiles widens the field naturally.

Common pitfalls

• The tick-box matrix: a generic grid produced for the annual report and never used in a nomination decision.
• Self-assessment inflation: uncalibrated scores that hide the gaps the matrix was meant to reveal.
• Recruiting in one’s own image: the brief says one thing, but the shortlist ends up resembling the existing directors.
• A static document: the strategy moves, the board changes, and the matrix stays as it was three years ago.

Keeping the matrix alive

A skills matrix is a working document, not an annual disclosure. It should be refreshed whenever the strategy changes materially, before every nomination decision and as part of the annual board evaluation, where the behavioural attributes it does not capture can be discussed openly. Used this way, it gives the chair and the nomination committee a clear and defensible answer to the question every shareholder should ask: is this the right board for where the company is going?

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