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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

  • 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:

  1. they should have professional training, experience and maturity
  2. 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.