Defining a competency-based model for nursing management development will help to establish core competencies for nursing managers which will not only strengthen their practice and provide further learning and development opportunities, but will also provide the basis to focus training and professional development efforts. This paper identifies the competencies important for effective nursing management in the public and private health sectors. A total of 420 senior nursing managers in South Africa were surveyed using a self-administered questionnaire. Respondents had to rate the importance of 51 competency items as it pertains to effective nursing management. Self-management, controlling, health/clinical, organizing, people management, planning and ethical/legal competencies were found the most valuable for optimal nursing management. These findings reflect the reality of the nursing management milieu and will be useful in the design and delivery of management development programmes aimed at enhancing nursing management capacity. © 2010 Blackwell Publishing Asia Pty Ltd.