So, the big day has arrived, and you have been asked to join a Board of directors. But what is your next step? How can you navigate this decision and make sure that you are making the right move in joining? Before finalising your new position, there are nine essential steps you should take into consideration.
Fiduciary duties
Align yourself with the company’s mission
Understand the sector
Take stock of annual reports and records
Speak with current Board members (and past members!)
Review Board structure
Diversity
Where do you fit in?
Review the terms of reference for the Board
Joining a Board can provide immense benefits, both personally and professionally. No matter the kind of organisation you are joining, becoming a director can expand your professional network and give endless opportunities for growth in your field. Before jumping at the opportunity, however, take a minute to consider all aspects of the offer and make sure that you really know what you are signing up for.
Fiduciary duties
- Your duties and responsibilities as a company director will be listed in the Company Acts
- You should familiarise yourself with these prior to accepting the position
- Make sure you understand the Company Acts of your country and industry, as well as other acts covering your chosen/prospective field
- Verify that no conflicts of interest exist between your current position(s) and the new role you hope to accept
Align yourself with the company’s mission
- Understand the organisation’s purpose
- Make sure you are familiar with their mission statement
- You can only contribute meaningfully to the organisation if you are truly passionate about its mission
- Your leadership and oversight guidance will achieve true impact if you are invested in the common goals of the company and seeking to achieve those
Understand the sector
- You should have a full understanding of the field in which the business you hope to advise operates
- Ask about the organisation’s business model, competitive moat, reputation and any operational risks involved
- Plan to be fully informed about the company you are joining in order to effectively lead and also maintain your professional reputation
Take stock of annual reports and records
- Read through any information you can gather on the company’s track record, in particular their last three years. This will help bring you up to speed on their operations, finances and current standing
- Read the last 5 - 6 board meeting minutes
- Read analyst reports and participate in the quarterly earning calls if the company is publicly-traded in order to get a better picture of the competitive landscape, CEO performance and organisation strategy
Speak with current Board members (and past members!)
- Reach out and ask about their experiences and their visions for the company; this will give you an understanding of the challenges and direction of the organisation
- Ask Board members if performance reviews of the Board have been regularly carried out and, if yes, what the recommendations were – do they feel that these have been implemented?
- Speaking with other members can help you gauge the workplace culture as well and decide if you would be a good fit
- Take this time to explore the relationship between the Board to the management team and vice versa – is management receptive to the Board’s recommendations? Do both groups work together to benefit the organisation?
Review Board structure
- What kind of time commitment will be expected of you as a Board member?
- How many meetings will you need to attend per year? How many subcommittees does the Board have? How many meetings do these have?
- Make sure that you have adequate free time to take on the responsibilities that come with the position
Diversity
- How diverse is the Board?
- Diversity comes in many forms:
- Is there sufficient gender representation?
- Is there sufficient BIPOC representation?
- Does the Board welcome people with a variety of backgrounds?
- Is there an awareness of ESG goals, and are they being met consistently?
- Is the Board committed to inclusion in its outreach, hiring practices and conduct?
- A diverse Board makes better decisions
Where do you fit in?
- Has the nomination committee performed its job well? Are you being recruited for a specific skill/to fill a niche?
- Will you be able to maximise your value in the position? Does the position cater to your expertise, presenting an opportunity for you to contribute in a meaningful way built upon your prior experience and knowledge?
Review the terms of reference for the Board
- Take the time to review the terms of reference for the Board and make sure you feel able to perform all of the duties expected of you
- Be mindful of establishing boundaries from the onset between your new position and the unrelated tasks of day-to-day company operations
- Serving on a Board is a balancing act: on the one hand it will help you improve your managerial, interpersonal and leadership skills and expand your network, yet on the other hand it comes with reputation challenges and (ever-growing if not kept in check) time commitments