Emotional intelligence: A key attribute for the boardroom

The current business landscape is characterised by unprecedented volatility and uncertainty. Business entities are grappling with disruptive technologies, economic uncertainties, rapid changes and shifts in consumer preferences.

In this dynamic environment, the role of the board of directors must evolve to cope with these global trends. While traditional skills such as business acumen, financial literacy, strategic thinking and industry expertise remain crucial, a new set of competencies – including innovation, inclusiveness and especially emotional intelligence – are increasingly becoming important attributes for board members.

In the current business environment, emotional intelligence is increasingly becoming a non-negotiable attribute for individual board members. Emotional intelligence refers to the ability to understand, manage, and utilise emotions effectively. While often associated with leadership, it is equally vital for board members to be self aware, self controlled, manage relationships positively and show empathy to others in making decisions that will drive organisations to success.

When it comes to decision-making, emotional intelligence enables directors to consider not only the rational aspects of decision making but also the emotional implications of the decision to employees, shareholders, investors and other stakeholders of the business entity. By understanding the emotional responses of stakeholders, boards can make more informed decisions.

In today’s disruptive operating environment, crises are bound to happen. Some of these crisis may be too critical and threatening the future of the organisations. In such situations, the Board of Directors have to intervene to manage the crisis and find solutions.

Board members need to be composed, work collaboratively while harnessing the strengths of each board member to make sound decisions. A sound board knows the importance of using the right means and channels to effectively communicate with stakeholders, mitigating panic and building trust between the business entity and the stakeholders.

A high-performing board is built by a strong and cohesive team of board members and emotional intelligence plays a pivotal role in cultivating strong horizontal and vertical relationships within the organisation. Each board member has to understand and respect the opinions of other board members while also recognising the strengths and weaknesses of fellow board members.

Board chairs, in particular, have to be in control of the boardrooms to ensure views of each board member are respected and each board member contributes meaningfully and acts in the best interest of the organisation. When making decisions, boards must ensure the decisions are arrived by all board members collectively without sidelining any board members even when they represent unpopular and minority views. Unity in diversity of the board is necessary in building a harmonious working environment in the boardrooms.

For governance to thrive, boards must communicate effectively. This involves choosing the right channels and methods to engage with different stakeholders, such as employees, customers, investors and the wider community. Board directors with high emotional Intelligence do have the ability to listen to feedback. They also have the ability to communicate effectively even at the time when they make unpopular or controversial decisions.

In the post-Covid-19 era, building corporate resilience has emerged as the key agenda within the boardrooms. Boards are expected to manage volatilities and shocks emerging in the business environment.

A board which is equipped with emotional intelligence is better positioned to come up with the right strategies to absorb these shocks. By understanding the emotional dynamics at play, directors can make a more significant impact on the company’s/organisation’s long-term success.

While traditional skills remain essential, emotional intelligence has become a critical component for effectiveness of the boards. By prioritising emotional intelligence, directors can enhance their competence and skills in decision-making, crisis management, building strong teams, effective communication and, in turn, enhance the capability and agility of organisations to respond to the rapid changing business environment.

Francis Kiwanga is an advocate, corporate governance expert and certified director. [email protected]