Why soft skills matter for Non-Executive Directors
In the boardroom, Non-Executive Directors (NEDs) play a crucial role in steering a business towards success. While industry expertise, financial acumen, and strategic thinking are often emphasised, there’s a set of less tangible skills that can make or break your effectiveness as a NED: soft skills.
These often-overlooked abilities are critical in navigating the complexities of boardroom dynamics and ensuring that you can contribute meaningfully to the organisation's governance and strategic direction.
What are soft skills?
Soft skills are personal attributes, personality traits, inherent social cues, and communication abilities. It includes everything from emotional intelligence and adaptability to communication and leadership.
Unlike hard skills, which are the technical skills required to perform specific tasks, soft skills are more about how you work and interact with others.
Why are soft skills important in the boardroom?
In the boardroom, the ability to influence, negotiate, and collaborate effectively is essential.
Soft skills help NEDs navigate interpersonal dynamics, manage conflicts, and create a collaborative environment. These skills are the glue that binds the board together, enabling it to function cohesively and make well-rounded decisions.
Soft skills in action
The following scenario is made up, with the intent of showing how the right soft skills can work to your advantage.
Imagine a scenario in a boardroom where the company is facing a critical decision about whether to pursue a merger with a competitor.
The board is divided, with some members strongly in favour, citing potential market expansion and cost synergies.
Others are concerned about the cultural fit and potential layoffs.
Tensions are high, and the discussion is at risk of becoming unproductive.
In this situation, a Non-Executive Director (NED) with strong soft skills could play a crucial role in steering the conversation towards a more constructive and collaborative outcome.
As the discussion unfolds, one NED notices that the CEO, who is a strong advocate for the merger, is becoming increasingly defensive and dismissive of concerns raised by others. This NED, equipped with high emotional intelligence (EQ), recognizes that the CEO's defensiveness may stem from feeling personally invested in the merger, perhaps seeing it as a capstone to their tenure. The NED also observes that some board members, who are concerned about the merger's impact on employees, are becoming frustrated because they feel their voices are not being heard.
Here’s how a Non-Executive Director can use their soft skills
With the above scenario in mind, here’s how you might be able to use soft skills to navigate it towards a favourable outcome.
1 Emotional intelligence
The NED acknowledges the CEO’s passion for the merger, addressing their emotions without dismissing them. By saying something like, "I can see that this merger is something you feel strongly about, and that’s understandable given the potential it has. However, it’s also clear that some members have valid concerns that need to be addressed," the NED validates the CEO’s feelings while also bringing attention to the importance of a balanced discussion.
2. Active listening
During the meeting, the NED actively listens to the concerns raised by other board members. They summarise these concerns, ensuring everyone feels heard: "What I’m hearing is that while the potential benefits of the merger are significant, there’s a lot of anxiety about the impact on our company culture and employees. Is that accurate?" This not only clarifies the concerns but also signals to others that their opinions are valued.
3. Diplomacy
Understanding the need to maintain harmony, the NED diplomatically suggests a way forward that addresses both sides: "Perhaps we could consider forming a working group to explore these concerns in more depth before making a final decision. This way, we can ensure that all perspectives are thoroughly examined." This proposal helps de-escalate the situation and offers a constructive path forward.
In this scenario, the NED’s soft skills were essential in navigating a highly charged discussion, creating a collaborative environment, and guiding the board toward a more thoughtful and unified outcome.
The NED also helps to defuse the tension, ensuring that all board members feel respected and heard. The board decides to delay the final decision on the merger, agreeing to conduct a more thorough analysis of the cultural implications and potential impact on employees. This allows the board to make a more informed and cohesive decision, ultimately benefiting the company.
Soft Skills: The foundation of effective boardroom leadership
Soft skills are the invisible threads that hold boardroom interactions together, enabling NEDs to lead with empathy, navigate disagreements, and drive meaningful outcomes. As the stakes in corporate governance grow higher, the ability to influence, listen actively, and resolve conflicts becomes a critical differentiator for effective leadership. By honing these underrated skills, Non-Executive Directors can make a profound impact on the companies they serve, fostering collaboration and driving success even in the face of complex challenges.