The Skillset

Key investors are watching skills matrices closely. They are looking for signs that the board takes its composition and succession planning seriously, aligns its skills and capabilities with the organisation’s strategy, and acts on skill gaps or overlaps among directors. Investors are arguably more concerned about the process behind the skills matrix than its published information, which has been reasonably broad since the majority of ASX 200 companies started including matrices in their annual reports from the 2014-15 financial year. “The chairman’s statement and board skills matrix in the annual report are a litmus test of board culture,” says Pru Bennett, head of investment stewardship, Asia Pacific, at BlackRock. “We can quickly tell companies that take the skills matrix seriously and those that do not get it. That data is put into our governance screens that feed through to BlackRock’s fundamental equities team.”