What Competencies Should Directors Possess? Malaysia Perspective

Abstract

Directors' competencies are important to corporate governance. As this issue has not yet been studied extensively in Malaysia, this study determines the key competencies of Malaysian company's directors using qualitative approach involving two stages of Delphi Technique. In the first stage all information pertaining to directors' competencies in the literature had been reviewed. In the second stage, the key competencies identified in stage one were the criteria for developing a semi structured questionnaire. Participants were asked to rank the competencies in term of their importance for directors' performance. Based on personnel interviews with 41 participants, eight types of competencies were found to be essential for Malaysian companies' directors. Financial competencies received the highest responses, followed by corporate planning, business forecasting, legal, risk management, marketing, human resource and international business. This paper provides important evidence to support the conclusions drawn from the study about the importance of relevant directors' competencies for board and corporate effectiveness.