A typical approach to the selection process for board appointment is the grid matrix. The grid functions as an easy way to identify the different areas of expertise and experience that the directors on a board lack now or will lack in the future.
The grid matrix is formatted with the board’s desired backgrounds listed along one axis of the table and the names of each current director listed along another axis. Backgrounds that those on the board already possess will be checked off. The remaining blanks on the grid indicate the deficits that the board will seek to fill.
Depending on the current state or need of a company, different backgrounds are desired of potential board members. A board may start looking for a new member when a director leaves due to mandatory retirement, death, conflicts of interest, disability or resignation.
For example, if a company is about to go public, a director with past experience with an IPO would be able to offer valuable insight. If a company is in a state of distress, a director with a strong track record with turnaround situations may be an asset to the board. In the case of a company expanding offshore, a director with international experience is desirable. In addition, the demand for directors with experience in digital sectors like cybersecurity and social media management is increasing with the rise of greater technology and the Internet.
As the economic and social significance of board diversity becomes more widely recognized, gender and minority representation are now being incorporated as criteria to consider in the grid matrix approach to board appointment, as well.