When you have proven financial, management or legal skills, it is very possible that you may be invited to sit on a board of directors. What do you have to know before accepting this role that comes with its share of responsibilities?
Accepting for the right reasons
Although the offer is flattering, a time for reflection is required. Becoming a director of an organization or enterprise means contributing to defining its directions, setting its goals and developing its strategies while monitoring its operation of day-to-day business. If the organization’s sector of activity and mission pleases you and matches your values, it’s for you. Conversely, accepting only for the networking or to be able to include it on your resume can damage your reputation, very quickly.
Information about the organization
Try to get as much information as possible about the enterprise or organization that approached you: reputation and skills of the executives, financial balance sheet, strategic plan, legal file… In summary, anything that could harm the growth or survival of the organization.
You can also obtain information on the management team and its relations with employees to understand what type of people will have to implement the decisions made at board meetings.
Assess the risks
As a director, you are responsible for the good governance of the organization, which means that you could be convicted of financial or other misconduct, such as payment defaults, actions that compromise workplace health and safety, violations of securities law, etc. Check if the enterprise has liability insurance for the directors and officers before you commit to it.
Make sure that the enterprise or organization shows a clean slate on environmental or corporate responsibility issues. Being associated with these hot issues followed by the news media could do great damage to your reputation.
There is no rule: the number of board meetings and their length remains at the discretion of the enterprise or organization. You will have to spend time to participate in board meetings, and you will also have to prepare for them and understand the main issues and challenges of the industry by following the news, an investment of about 300 hours per year for a corporation or fifty hours for a NPO.