Assessing board member skills: a simpler approach

11 November 2026

Authors: Christine Hauner, Danijela Simovic Milic, Elizaveta Klippert

Effective boards depend on members with the right skills. This is not a new requirement, having long formed part of the broader fit and proper assessment framework. Article 91(1) of the Capital Requirements Directive requires each member to have the necessary knowledge, skills and experience needed to perform their duties at all times. The requirement also applies to the board as a whole. Its members must collectively be able to oversee the institution's activities and risks, drawing on a broad range of expertise.

The joint European Banking Authority and European Securities and Markets Authority Guidelines on assessing the suitability of members of the management body (EBA/GL/2017/12) harmonised this approach back in 2017 and confirmed it in 2021. They provide a detailed but non-exhaustive list of relevant skills. The ECB has consistently applied these requirements in its suitability assessments, taking account of each board member’s role and responsibilities.

Drawing on the 16 skills listed in the joint EBA and ESMA Guidelines, ECB Banking Supervision has identified four skill sets that are crucial for sound and prudent leadership: communication, continuous learning, judgement and the mindset to challenge. This approach, which is informed by market experience and lessons learned from past board failures, helps institutions and supervisors focus on the skills that matter most for effective governance. This is what the skill sets mean in practice:

Communication: The board member conveys complex messages clearly and precisely, both verbally and in writing, while navigating challenging conversations and fostering constructive dialogue in board settings to ensure all voices are heard and all information is passed on. The board member listens actively and effectively, makes use of non-verbal communication and actively engages with the audience.

Continuous learning: The board member demonstrates the desire to learn continuously and further their professional growth by acquiring and applying new knowledge and approaching complex questions with curiosity, while also possessing the humility to recognise the limits of their own knowledge and experience.

Judgement: The board member exercises independent judgement and balanced decision-making in the best interests of the entity through strategic insight and sound reasoning, drawing on professional confidence, technical expertise and experience.

Mindset to challenge: The board member consistently acts with integrity and authenticity, showing resilience in challenging situations and speaking up with conviction to uphold accountability and trust. This includes the courage to challenge groupthink and speak as a “lone voice” when necessary.

These skill sets do not replace the legal framework. Instead, they offer a practical lens through which to apply it, thus simplifying processes for institutions and supervisors. Institutions remain responsible for selecting and appointing suitable board members. Prioritising these core skill sets will put institutions in a better position to address future challenges and safeguard financial stability. This pragmatic and proportionate approach not only simplifies compliance but also helps institutions build stronger, more effective boards for the future.

Technical qualifications remain essential for board members, but they are not enough on their own. The fit and proper assessments conducted by the ECB since 2014, together with lessons learned from recent bank failures, show the value of broader skills. Effective board members communicate clearly in difficult situations, continue to learn, and recognise the limits of their expertise. They also exercise sound judgement taking diverse views into account and challenge decisions when necessary, particularly under pressure or when this means breaking with the consensus.