Corporate Governance

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8 Traits of an Effective Company Director

If you’re a new or aspiring company director, it can be intimidating trying to develop your professional skills. After all, unless you have a personal mentor, there isn’t really anyone telling you what skills you should be focusing on developing. It’s down to you to figure out your professional development path, and that can be a hard process to tackle on your own.

There are a few key traits, however, that are essential when it comes to company directors and they distinguish those who are merely okay at their jobs from those who are exceptional.

To give you some guidance, we’ve compiled this list of the 8 traits that we feel are essential in an effective company director.

1.   Conflict resolution

Company boards can be charged atmospheres at times, depending on the subject being discussed and the conviction of the opinions held around the table.

It seems natural then that conflict resolution would feature high on the list of traits needed in a company director.

As a leader in an organisation, people will often look towards a company director or someone in a similar position of authority for help in resolving conflicts, finding accommodation between opposing views and acting as a neutral arbitrator or mediator in a conflict.

Conflict resolution can seem like quite a specialist tool to have in your skillset but it’s one of those traits that can turn a good company director into a great company director, so it’s worthwhile taking some time to develop it in your own leadership practice.

This blog by Entrepreneur explores some key conflict resolution skills for the workplace: developing those listed here can be a great way to improve your effectiveness as a company director. 

2.   Negotiation

In order to be a truly effective company director, you’re going to need to know how to negotiate.

Negotiation is key to many aspects of the way that modern organisations work.  Company directors from time to time are responsible for negotiating everything from pay arrangements with trade unions and favourable terms with suppliers, through to partnerships with external stakeholders. As a result, being able to achieve mutually beneficial deals with external entities is an essential skill of an effective company director.

Negotiation can be a tough skill to crack but it’s ultimately about being able to use strategy and analytics to reach compromises that benefit two opposing sides.

This blog by Indeed features some great advice on what negotiation skills specifically are and how to build them.

A company director sat at a table in front of a laptop and cup of coffee, holding a smartphone in his hand and looking at the screen

3.   Strategic thinking

It has become a bit of a cliche to say that company directors need to think ‘strategically’. There’s no denying that strategy, and the ability to think strategically, is one of the most essential skills that a company director needs to have.  What exactly do all those blogs, motivational LinkedIn posts and Twitter threads mean though when they refer to ‘strategy’?

In terms of organisation management and leadership, strategic thinking refers to the process of achieving a particular goal or set of goals. It is ultimately about thinking how you can take into account the myriad other variables and factors that present themselves when you’re trying to achieve a particular outcome, anticipating potential challenges and overcoming them.

Of course, strategies can be as simple or as complicated as you choose to make them. A strategy, after all, is simply just a plan for how you aim to achieve something.

This blog by LinkedIn has some great advice about how to cultivate strategic thinking skills and some useful tips. 

4.   Organisation and time management skills

Whilst it might seem that a lot of the traits listed in this blog are abstract ones - ie. they’re based on non-physical, or mental-based actions - one of the most essential traits that any good company director will have is a pretty obvious physical one. We’re talking about the ability to organise yourself and your time.

Organisation skills are fundamental to the success of your professional practice, whether it’s putting in place complex processes for completing projects or arranging your diary so that you can fit competing demands around each other.

There’s lots of advice out there about how to improve your organisational skills. Three of the best tips we’ve read are:

  • Create lists to make it clear what you need to do and by when
  • Segment large projects into smaller projects to make them easier to complete
  • Identify goals

But there’s more to organisation and time management than the physical skills. It also means changing your mindset and taking accountability for your actions. Above all, it means learning when to turn down opportunities if it puts the quality of your work in other areas suffering. This can be a hard skill to master - even for long-experienced company directors.

This blog has some really useful tips for improving your time management skills and general organisation in a corporate director context: it’s well worth a read if you’re looking to build your skills.

A female company director sat at a table working, staring at the camera

5.   The ability to inspire others

Ask someone to define the concept of a leader and you’re guaranteed to hear a definition along the lines of ‘someone who can inspire others’. And that’s true: a good leader definitely is someone who has the capacity to inspire others. It’s also a trait that the most effective company directors have in abundance too.

You don’t have to be a Stakhanovite superhero to inspire others by your work. Often, just focusing on simple things like doing your job well, being fair, friendly and approachable and being reliable can be enough to inspire other employees. Be the example of performance and behaviour that you expect from other people and you’ll soon find that your reputation climbs in the esteem of others.

6.   Adaptability

The wild, unpredictable events of the last few years have proven that there’s a lot of truth in the statement that a successful, competitive company is one that can maintain its flexibility and adaptability in the face of a changing business environment. 

As the people at a company responsible for ultimately leading the company and deciding its strategic direction, it’s obvious that company directors will need to show this same willingness to adapt their mindset and actions based on the situation that they’re presented with and what’s best for their company - not necessarily themselves or their egos.  

In terms of improving your adaptability, the best trick is to try and keep an open mind. Practicing meditation and mindfulness techniques can be a good way to improve your outlook on change and in changing your opinion on a situation. This blog by the Harvard Business Review has some great techniques that you can use to improve your flexibility as a director and organisational leader.

A confident company director in front of a skyscraper

7.   Strong ethics and morals

You only need to look at the ongoing fallout of one of the biggest governance scandals in recent memory to see how badly professional reputations can be soiled by lack of morals and ethics when it comes to leadership positions.

 We are, of course, talking about the COVID-19 Partygate saga, which gripped the UK at the start of the year, when it came out that senior figures in the Government and Conservative party had been hosting large parties and social gatherings despite these gatherings being illegal under wider public health guidance for the rest of the country.

When the scandal broke in early 2022, widespread anger spread throughout the country, but rather than admitting their mistakes, the Government doubled down on their view that they had done nothing wrong - ultimately costing Prime Minister Boris Johnson his job, and the Conservatives their poll lead.

If Partygate shows us anything, it’s that the general public expect people in leadership positions to show strong moral leadership, to maintain scrupulous honesty and to lead by example.

Company directors should be taking clear notes about the potential impact of losing sight of your ethics and your moral compass when you’re in a leadership position.

8.   Decision-making

Company directors are responsible for making some of the most consequential decisions at an organisation. As a result, it’s pretty obvious that strong decision-making skills will form a key element of what it takes to be a truly effective company director.

Making decisions is harder than you think. It requires having the confidence to follow through on your convictions and to take measured, qualified risks that pay off.

As this excellent blog by Sounding Board lays out, decision-making in the context of being a company director is a pretty broad skill that’s really made up of a series of smaller ones, like logical thinking, emotional intelligence and problem-solving.

How to develop the skills you need to be an effective company director

Of course, there’s no easy answer for how to develop the skills and traits that you need to become a truly effective company director. One approach is to learn by doing, and throw yourself in at the deep end, but that isn’t suited to everyone.

A good compromise is to study a dedicated professional qualification in corporate governance. We offer 100% online corporate governance qualifications, like the Corporate Governance Institute Diploma in Corporate Governance or the Corporate Governance Institute Diploma in Environmental, Social and Governance that you can study from anywhere, letting you improve your director skills whilst fitting study around existing commitments.

Whatever route you choose to go down to improve your skills, stick at it and eventually you’ll see an improvement. Good luck!


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