I don’t know why, but I have always thought that “matrix” was a cool word.
Maybe it is its connection to the Keanu Reeves movie where he dodged the bullets in acrobatic slow-motion. Or perhaps it is the fact that I’m a fan of the NBA and the nickname “The Matrix” was given to former Phoenix Suns forward Shawn Marion by analyst Kenny Smith because of his ability to contort his body mid-flight. Or maybe it is simply just fun to say.
“Matrix!”
Anyway, increasingly, boards are finding the word “matrix” fun to say, not because it sounds cool, but because it is a tool that is helping them ensure that they have the talent on their roster to guide their companies into productive, profitable futures. That was certainly the impression I got while moderating the “Most Important Board Skills for a Disruptive Time” panel at Private Company Governance Summit 2024.
James Taylor, chair of family-owned ABARTA Inc., says that for his board the skills matrix is a two-sided document, with one side focusing on skills and experience and the other one drawing focus to human characteristics.
“We tend to favor generalists,” says Taylor. “We like to have larger, more sophisticated representatives from larger, more sophisticated companies on our board. And we focus on their position in the company – CEOs of family businesses, whether they are family or nonfamily.”
But ABARTA’s skills matrix doesn’t just track skills; it also tracks the dates when those skilled individuals are planning on leaving the board. It’s a tool that allows director departures to be not just another thing to keep a chair up at night, but an opportunity to improve the board.
“You can take stock of what you have today, where you’re strong, where you’re weak. We use it as a forward-looking instrument and think three to five years down the road,” says Taylor. “Some family businesses think in terms of decades, if not generations. But the people that got you where you are today may not be the people that get you where you want to be tomorrow.”
With the emergence of AI as a concern for private company boards, many skills matrices are beginning to have AI technology experience appearing more prominently as a necessary area of expertise. But AI is a very specific area of knowledge at this point in time, something that brings about the argument of “generalist vs. specialist.” Do you bring an AI expert on to your board even if their wealth of knowledge is not as well-rounded as your typical director? Or does that run the risk of having the board shut down and “look at the expert” when matters of AI come up in the boardroom? Andrea Hayward, director of Rehrig Pacific Company, sees another possibility.
“I think industry experts are more valuable sometimes as an advisory position versus being on the board because, six months from now, we’ll be having a different conversation about technology and you just can’t continue to rotate folks on and off that fast to stay current. I know a lot of people want to get on boards and it’s a great thing to do, but also being an advisor to a board is extremely impactful.”
When it comes to skills that are valuable for the board, Martha McGuire, director of TAB Bank, believes there’s no replacement for the experience that comes from making the big decisions. While the value of having CEOs on the board has been tested and questioned in past years because of prioritization of specific skills, the capacity to make the ultimate call is still a boon to boards.
“I think that when you’re an employee in a corporation, if the decision’s big enough, you end up in the CEO’s office and you’re giving him or her the options and asking them to make the decision,” says McGuire. “You can get that experience from running a line of business. You don’t necessarily have to be the CEO. But I think it’s important for people coming on to the board to have been the ultimate decision-maker in some capacity.”
So, what should be on your board’s matrix? Ultimately, that will come down to the specific needs of your company as well as the industry in which you operate. But when you consider that guiding the decisions on what those specific needs are is a key role of the board, it’s a pretty good argument for including experience in high-level decision-making on your list.