Author
Queensland Audit Office
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Appointing the right people to the board of a large government entity ensures it has the right mix of skills needed to implement its strategies. It also helps the board ensure the entity conducts itself in an accountable and transparent manner.

In Queensland, there are 50 large government entities governed by boards – with these entities delivering crucial energy, health, ports, water, and rail services for the community. The combined assets of these entities are valued at $228 billion.

So, how do you find the right people for each board?

Skills

Finding the right people to be on these boards starts with understanding the skills that the board needs now, and the skills it will need to implement its strategies into the future. For example, a board may have 2 retiring members with accounting and legal skills, but it may also be constructing major new infrastructure. If other members also have accounting and legal skills, the board may want to bring in a member with construction or project management skills.

A good way to help identify the skills needs is to understand what skills the board currently has, and any gaps that upcoming vacancies will create. A skills matrix is generally considered the best way for a board to record its skills. An example of a generic matrix is below.

Skills/diversity

Director 1

Director 2

Director 3

Director 4

Accounting

✔

 

 

 

Legal

 

✔

 

 

Industrial relations

 

 

 

 

Technology (e.g. cyber security)

 

 

 

✔

Industry (e.g. energy, transport, investment portfolios)

 

 

✔

✔

Governance

✔

✔

✔

✔

Risk

 

✔

 

 

Gender

Male

Female

Male

Female

Aboriginal and Torres Strait Islander person

✔

 

 

 

Person with disability

 

 

 

✔

Qualifications

BBus(Accy), CPA

LLB

BEng(Mech)

BInfoTech(CompSc)

Of course, there are some standard skills that all boards would value from their members having, such as communication skills, intellectual curiosity and being an active contributor. Boards should customise the matrix as needed.

Independence

Better practice tells us that independence is one of the key attributes that effective board members bring to the table. Government and the public can have confidence that the advice given, and decisions made, by independent board members are free from bias and are entirely within the best interests of the entity.

An independent board member is not aligned with the interests of management or government, and can – and will – bring independent judgement to bear on issues before the board.

Examples of interests, other positions and/or relationships that could raise problems with the independence of a board member include:

  • employment history – employed in an executive capacity by the entity or related entities in the previous 3 years
  • business relationships – working for/as a supplier, professional adviser, consultant or customer in the previous 3 years
  • government relationships – lobbyists, ministerial staffers, or former politicians
  • personal relationships – has family, friends, or close ties with a person whose employment history or business relationships fall into the above categories
  • length of service – serving on a board for a substantial period may reduce the member’s independence from management and affect their willingness to challenge established business practices.

Of course, if a director falls within one or more of these examples, they shouldn’t automatically be ruled out. But the board should be confident that the interest, position or relationship in question is not material and will not interfere with the director’s capacity to consider issues independently. This provides confidence that they can act in the best interests of the entity, rather than in the interests of management or another party.

What can government entities do to help a board find the people it needs?

  • Keep track of when existing board members’ tenures are set to expire. Succession planning is key to ensuring that boards can continue to make decisions and transitions are seamless.
  • Know the skills the board wants before you start. Refer to the board’s skills matrix to get a comprehensive assessment of the current skills and any gaps created by upcoming vacancies, especially those needed to implement its strategy.
  • Go for a wide field. Networks are useful but risk cloning the board with ‘mates’ who all think the same. You may need to recommend more than one candidate per vacancy.
  • Don’t be afraid to look for people with diverse perspectives on opportunities and threats. HR consultants are experts in this area and can help you find them. But they need to know what you are looking for and how they will assess the potential candidates.
  • Plan out your recruitment process and set target time frames so you can complete the process quickly.
  • Don’t lose a great candidate to another board while the approval process chugs along – keep candidates informed of how the process is going.
  • Reinforce to approvers the importance of making timely decisions to ensure you don’t lose great people while they wait.
  • Reflect at the end of the process on what went well and what you would do better next time. Document and share learnings to continuously improve.

Finding the right people can be hard, and recruitment by its nature is competitive. Entities need to know what they’re looking for so they can attract the best board members and appoint them before another board snaps them up.

Resources

QAO reports to parliament
Better practice guides
Tools
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