Core Competencies For Directors


Aims of setting up Core Competencies are as follows:-
  • To identify skills, knowledge and qualities required of drectors, reflecting on today's demands.
  • To form a basis for developing:-

    • Continuing Professional Development Pogrammes for directors.
    • Further updates in light of changing demands.
    • Standards for accreditation of members, attaining professional certification and a Registered Professional Director status in future.
The Continuing Professional Development ("CPD") programmes organised by HKIoD for directors include seminars leading to a HKIoD Diploma, speaker meetings, professional talks, themed workshops, special review groups, conferences and forums, position papers on corporate governance issues, publications of guidelines and standards on best practices, etc

Competencies Identified

Five groups of skills, knowledge and qualities have been identified as being necessary for anyone serving or aspiring to serve as an effective Director., viz

Group 1: Corporate Business Functions.
Group 2: Power, Responsibility and Liability of the Board and the Individual Director.
Group 3: Board Development and Boardroom Practice.
Group 4: Individual Attributes and Qualities.
Group 5: Business Ethics.

Group 1: Corporate Business Functions, at a Strategic, rather than Operational, Level.

  1. Strategic Planning:-
    1.1 Change management: vision of change and to align the company accordingly, down-sizing or right-sizing, merger and acquisition, corporate restructuring, IPO, policy development.
    1.2 Monitoring and follow-through from strategic planning to implementation.
    1.3 Managing performance: installing performance appraisals and instilling confidence.
    1.4 Evaluation of results.
    1.5 Contingency planning, risk management and crisis management.

  2. Finance:-
    2.1 Interpretation of financial statements.
    2.2 Evaluation and monitoring of the financial health of a business and identifying warning signals.
    2.3 Determining the level of details and frequency of reporting for effective direction.
    2.4 Financing alternatives.
    2.5 Business/project planning and appraisal.

  3. Marketing:-
    3.1 Concepts of marketing strategy.
    3.2 Processes in developing marketing strategy.
    3.3 Evaluating marketing strategy.

  4. Production and Product/Service Delivery:-
    4.1 Customer needs and market demands.
    4.2 Processes in production or service development.
    4.3 Customer care and after-sale support.

  5. Organisation and Human Resources:-
    5.1 Organisation development, culture and structure.
    5.2 Directing and motivating senior management.
    5.3 Compensation tools.
    5.4 Continued training and education.
    5.5 Succession planning.
    5.6 Evaluation of organisation effectiveness and HR strategy.

  6. Information Technology:-
    6.1 IT as a tool in business development.
    6.2 IT as a tool in management.
    6.3 Strategy of investment in IT.
    6.4 Evaluation of IT strategy.

  7. Compliance and legal knowledge for business.
Group 2: Power, Responsibility and Liability of the Board and the Individual Director.

  1. Significance of corporate governance.
  2. Duties to stakeholders - shareholders, employees, creditors, regulators and community.
  3. Fiduciary duties.
  4. Responsibilities in directing management, disclosure, accountability and avoiding conflict of interest.
  5. Relevant knowledge in Companies Ordinance, Articles of Association, Directors' service contracts, compensation, termination, resignation.
  6. Risks, Directors & Officers liability insurance.
  7. Winding up.

Group 3: Board Development and Boardroom Practice.

  1. Board structure, culture and decision-making processes.
  2. Board proceedings, running board meetings and call of general meetings.
  3. Roles and relationships - Chairman, Managing Director/CEO, NEDs, INEDs etc.
  4. Working with committees.
  5. The Audit Committee.
  6. Working with external professionals, lawyers, auditors, advisers.
  7. Board audit/assessment.
  8. Continuing development and training of directors.
  9. Update on law, rules and regulations (listing and funding sources).
Group 4: Individual Attributes and Qualities.

  1. Communication skills including language proficiency.
  2. Vision and creativity.
  3. Team-building and team-playing skills.
  4. Analytical and synthesizing skills.
  5. Judgment and decisiveness.
  6. Coaching and facilitation skills.
  7. Initiative and taking action.
  8. Networks and skills to influence.
  9. Health - mental and physical.
  10. Emotional stability.
  11. All qualities associated with IQ (intelligence quotient), EQ (emotional quotient), AQ (adversity quotient), CQ (creativity quotient), VQ (virtue quotient).
Group 5: Business Ethics.

  1. Corporate sustainability,
  2. Social responsibilities and the justification of a corporation.
  3. Stakeholders relations.
  4. Anti-corruption practices, checks and balances.
  5. Equal opportunities.
  6. Data protection (privacy).
  7. Environmental protection.
  8. Ethical investment.
  9. Transparency.
  10. Corporate citizenship.
  11. Contribution to professional or industry development.


The definition of Core Competencies was initiated by the Training Committee of The Hong Kong Institute of Directors in 2001, through a series of workshops.


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