Joining A Board? – Ask That One Important Question (Or Two!)

By Paul Dubal, Governance Coach

By Paul Dubal, Governance Coach

There can be a huge amount of personal sense of achievement in securing a board position. You are at the very heart of the strategic direction, oversight and decision making of a company.  In the excitement of the appointment, many would-be directors fail to consider one fundamental question. In doing so they open themselves up to becoming quickly disillusioned and disengaged. Remember that the role of a director, whilst rewarding, is accompanied with an extensive set of fiduciary duties and responsibilities, and potentially unlimited liability in certain instances. If you are not familiar with those duties even now as you contemplate becoming a director, pick up the phone to us now! If you are familiar, that is a good start.

However, being aware of the director’s duties is only half the story. It does not cover the fundamental question, which is this:

Why Does the Company Exist in the First Place? What is its Purpose?

You may ask if that really matters. In my view it is fundamental to assessing whether the organization and its board would be a good fit for you. Does it align with your own personal mission? Is it a company you would sacrifice your time, effort, and energy to the exclusion of all else to protect its interests and reputation? Do you believe in what they are doing, for example in terms of the benefit it brings to the economy and the wider community? What if the company ceased to exist? Where would its customers go? How big a loss would it be? Personal alignment and belief in the good work the company is doing will sustain you in difficult times, when the organization is under stress and the actions of the directors are closely scrutinized.

Ancillary questions you may wish to ask: Does this company have a meaningful mission? If you want to remain motivated it is important to have a good reason for joining any particular board. Would working for this company be worthwhile or are you attracted by challenges it is facing, or perhaps by the status associated with being on its board? Although the primary task for all boards is to establish corporate direction, this is often the area in which boards find it most difficult to spend sufficient time, and about which directors most frequently report the inadequacy of their knowledge.  A purpose you can relate to, combined with a good cultural fit, would be a good indicator that this is a board and an organization you can commit to for potentially many years.

A shared understanding of a company’s purpose and long-term vision is important because it provides the context for strategy and decision-making.  As part of that assessment, you can ask the following seven (7) questions:

1. Does this company have a defined vision, mission and value statement?
2. Does the company give a sense of the future guiding decision-making and strategy?
3. Does it have a culture that determine behaviours, inspires positive emotion, and connects to the values of the organization?
4. Are the annual reports and corporate strategy consistent with the organization’s defined purpose?
5. Does the board hold regular off-site retreats or away days to review its purpose and considered strategy?
6. Are its plans consistent with the corporate strategy?
7. Are those plans consistent with legal and ethical requirements supported by the management?

If you identify with the company’s purpose, it’s worth exploring exactly what the expectations are around the role, and why you may have been invited to join the board.  What are the functional attributes and experience you bring, and how can you best support the board? 

Discussing those expectations with the chair will not only clarify what is expected of you but it might also enable you to highlight additional talents. Having that chat is always useful because it may also highlight some red flags. Make sure that you and the board are aligned in your vision and expectations of the other party so that the relationship can be mutually beneficial.

The Governance Boutique, experts in getting you board ready, can guide you to ask the right questions and ensure that you are able to conduct the right degree of due diligence that will give you comfort around purpose, vison and values and ensure that you are clear about what you can achieve on the board and how you will benefit from being on it.