Five essential skills for a director

What does it take to make that step up from manager to director and be truly effective in the role? If you have recently become a member of a board or are looking to continue your professional development, here are the core skills that everyone needs to be a successful modern director…

Strategic Thinking

Directors need to review their strategies to identify possible vulnerabilities, such as a potential takeover, availability of large cash balances and under-performing divisions. Once concerns are identified, directors need to evaluate how to address them, whilst also bearing in mind the shareholders’ best interests.

Good strategic thinkers can analyse the marketplace and identify opportunities to stimulate growth. They act decisively and are not afraid to change tack if a product isn’t delivering the anticipated results.

But they also consider the impact of key decisions, offer contingency plans and risk mitigation.

Brexit is an obvious example of how a director, or board of directors, must think strategically and mitigate against the potential risks posed for a business that trades within the European Union.

Anglo American PLC chairman Sir John Parker once wrote that “Controlled risk-taking lies at the heart of all commercial activity. However, boards can fail to manage risk for a variety of reasons. Some downside risks may emerge from within the organisation as a result of operational failures.

“But many corporate disasters occur due to the weakness of the board itself. The board has the potential to be both a source of risk to the organisation as well as an effective means of risk mitigation.

Parker went on the say that, “In some cases, individual directors may simply lack the necessary expertise or experience to understand the business in all its complexity. In other instances, a charismatic or overbearing CEO may dominate the boardroom conversation. Even a period of corporate success can, ironically, often prove to be a source of danger. It may make it difficult for the board to challenge or criticise the status quo.

“The board may fall victim to the delusions of ‘groupthink’ or overconfidence. It is all too easy for directors to discount the significance of these and other boardroom pitfalls: “It will never happen to us.”


Effective communication means providing employees with the information that will enable them to do their jobs properly.

Earlier this year, The Economist Intelligence Unit published a report titled, ‘Communication Barriers in the Modern Workplace.’ Over 400 senior execs, directors, managers and junior staff at companies across the US were surveyed and the report revealed that communication failures resulted in a delay or failure to complete projects (44%), low morale (31%), missed performance goals (25%) and lost sales (18%).

Lance Bachelor is the Group CEO of the Saga Group and an IoD member. He says “You have to remain cheerful, focused and connected, and not get lost in your own corner. It’s easy to assume you put out a video and everyone knows the strategy. It doesn’t work that way. You have to keep talking to people.”

Other things to consider when communicating business strategies and objectives should include:

  • Provide training and technical information that explains how tasks must be carried out, such as operating manuals or ‘knowledge banks’.
  • Give staff details of product specifications, availability and price lists.
  • Set clear objectives and provide job descriptions to let people know what is expected of them.
  • Explain and monitor the key performance indicators for everyone. Tackle underachievement by providing feedback, support and further training, if necessary.

Decision Making

As a manager, you are concerned with implementing the decisions and the policies made by the board. But once you become a director you will be required to determine the future of the organisation, its strategy and structure and protect its assets and reputation.

You also need to consider how decisions relate to ‘stakeholders’ and the regulatory framework. Stakeholders are generally seen to be the company’s shareholders, creditors, employees, customers, and increasingly, a community in which it operates.

Of course, there are so many different theories and interpretations of what constitutes a good decision maker.

John Kotter is an award-winning author, Harvard Professor and the founder of management consultants Kotter International. He says that for a business to keep moving forward, collaboration is the key.

“The average organisation is run by people who’ve been trained that making ideas happen is all about an elite few people. Why not get lots of people into the game – so, while doing their regular jobs, they help out with these bigger, more challenging issues? Having open discussions about opportunities is much smarter than appointing committees.

“The world has seen enough appointed committees. Then there’s bureaucracy, rigid accountability and metrics that measure certain things that are relevant right now but discourage people from trying new things.”


What makes a good leader is a subject so broad and far-reaching, that it has spawned countless books on the subject. Everyone develops his or her own style over time.

Justin Hughes, Executive Director of The Red Arrows, offers this simple explanation that provides a useful platform to consider what being a leader really means.

“Leadership is, in many ways, a discretionary bonus. It’s rarely what gets you promoted. That is getting the job done. But it can have an exponential impact on performance. Leadership is when one person follows another of their own free will because they feel engaged and inspired.

“Describe the leader you would follow to the ends of the earth. Few people will use words like strategic, effective or organised. The description tends to be values and behaviours which inspire respect. You know what it looks like. Be the leader for others that you want for yourself.”

Analysis and Use of Information

Whether it’s crunching the numbers, identifying market trends or simply cutting through the jargon that often masks what somebody is really trying to say, it’s important to know how to successfully harness the information and intelligence available about your business or sector.

Ultimately, it can help you to understand where your business has a competitive advantage and what issues you should be addressing.

Some of the areas to consider are as follows:

  • You insist that sufficiently detailed and reliable information is taken account of, and reported, as necessary.
  • You seek out all possible relevant information from a variety of sources, if available.
  • You can assimilate numerical and statistical information accurately, allowing you to make sensible, sound interpretations.
  • You can spot any potential problems with that information, as well as identifying the causes.

Do you know what you need to know?

The IoD’s range of professional development courses and qualifications are the gold-standard for board-level competency. Our online courses are practical, hands-on, and led by directors with extensive board-level experience.

Call our training team on 020 7766 2601

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