Choosing a director

Just as a builder wouldn’t invest in a new piece of machinery without identifying what they needed the machine for – a board should not invite an independent director to come on board before being sure of the expectation of their contributions.

Preparation

Consider the following:

  • look at the characteristics of the business and identify any gaps in existing expertise
  • evaluate if all roles are covered, and that everyone is clear about their role
  • family companies, in particular, may operate with individuals appointed not for their skills or potential, but because they're part of the family.

Important questions to consider

You need to ask:

  • Are there any gaps in the skills needed to grow the business?
  • Is specialist expertise needed in an area where the company lacks strength?
  • Is there potential to teach and mentor staff members or management beyond their current levels?
  • What kind of skills are needed to help achieve those goals?

Finding the right person

As a minimum, an independent director should possess certain basic attributes:

  • they should have professional training, experience and maturity
  • they also need to have good personal skills to manage the various relationships within the business and on the board.

Qualities to look out for:

  • business smarts – if a person doesn't understand your business they won't be able to add value
  • relevant knowledge of your industry – the closer their knowledge is, the better
  • the ability to see the big picture and add to it – governance is about performance, not housekeeping
  • independent thinking – ideas need to be challenged and discussed before decisions are made for new insights and ideas
  • teamwork – the board looks after the interests of the company.