Earned Skills vs Learned Skills of the Boardroom
This is a ONE THING article, which is featured in FDI’s monthly newsletter. Sign up to receive this in your inbox.
ONE THING is for the busy (speak of the devil) Future Director, in which FDI Founder Paul Smith picks just one thing Future Directors oughta know or do or stew on for the next month. We hope you get something (at least one thing) out of it.
Quite a bit’s happening in the governance world right now. The restructure of the RBA boardroom (that's the Reserve Bank of Australia to our overseas audience) for one. But if I was to zero in on one thing this month, it’d be this conversation between Scott Galloway and Byron Auguste, the CEO and co-founder of Opportunity@Work, on a recent episode of The Prof G Pod.
Specifically, it’s about why the labour market is so fundamentally broken. And, why I believe governance suffers too...but perhaps for a surprising reason.
Byron sees it like this — people who hire are naturally risk averse. After all, they’re culpable if they let a bear into the beehive. Because of this, there’s a huge effort to screen the grizzlies out. And the most common way of doing that is if the applicant has a relevant qualification.
Herein lies the rub.
The gateway to qualifications – training colleges, unis, institutes etc — are inherently inequitable. They aren’t equally available for everyone on the socioeconomic spectrum. Or, often geographically. And so the top tier of the spectrum gets favoured when vying for the top tiers of employment. Scholarships only go a small way in fixing this inequity and are often themselves inequitable. Strike one.
Next, qualifications aren’t the only (or even the best) signals for someone’s competency. Byron doesn’t mince his words here – they’re ‘okay-enough’ as indicators, especially in time-pressured environments where shorthand is needed, but there’s just too much emphasis placed on them. Strike two.
What frustrates Byron (and me alike), is that skills learnt on the job (‘learned skills’) are provenly just as complex as certified ones. It’s led him to consult companies like Accenture and McKinsey with a simple question – if you couldn’t screen people out because they don’t have a qualification, on what basis would you screen them in?
I think the same question can be levelled at the board community.
Many boards are forced to recruit non-qualified directors to their boards even though most of them make a qualification a pre-requite. On the face of it, and if there was good work done to create a "screener" for candidates, this wouldn't be a problem. However, here is where I diverge from Byron, because I believe the system of governance education is inherently flawed.
Unlike the world of executive employment, in the global population of non-executives, only a small fraction invest in money-intensive qualifications. From executives who don't feel that it adds anything substantial to their knowledge base and career prospects; to aspiring directors for which these are often out of reach; and experienced directors who don't think they need it, despite their gulf of knowledge on governance practices.
I agree that qualifications do not guarantee a candidate's skills. But I also believe that a distinct lack of qualified candidates can lead to dysfunction.
So, am I a cheerleader for expensive governance qualifications? A big fat no!
FDI is both an advocate for the need for far more qualified board members AND a shift in the governance education industry that makes these qualifications far more accessible, affordable and flexible to everyone. Plus, not just one-off courses at the start of the journey, but a lifetime of learning using a flexible and adaptable model of modern education techniques that lower the barriers and raise the overall skill levels of all boards.
Finally, I believe another solution is to expose people to governance far earlier in their careers. Good governance (ie creating the conditions for effective decision-making and stewardship of an enterprise) should be taught and cultivated throughout the enterprise, not just the board and executive. I'd even say it should be taught at school.
Not as a career step, but as a mindset shift.
A great example of this in action is Westpac’s Board Observer Program. This program lets skilled people, from Westpac Group and Minter Ellison, sit in on the board meetings of not-for-profits for 12 months and combines a virtual learning program (which FDI is proud to help deliver). This gives them valuable experience in how boards govern and new skills to take back into their day jobs.
Yes, we need boards to resist using qualifications as a default and look for candidates in their totality – earned skills and learned skills - but we also need to have far more skilled board members across a lifetime of a career. This requires a radical rethink of the governance education industry so that globally, directors can get the much-needed, relevant knowledge and skills to be effective in their roles.
We need some bears in that beehive.