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.
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:
- 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.