We’ve previously talked about why and how having an inadequate board member can put you at risk. And the best way to deal with such a risk is prevention, by taking a long, hard look at prospective board members before appointing them or when renewing time is approaching.
There are many things to take into consideration, but this checklist can act as a great starting point to ensure nothing’s left out. Make sure to customize it by adding any requirements established by applicable regulations and your organizations’ particular policies.
Skills and experience
- Appropriate knowledge and experience: Consider areas of expertise relevant to the board in terms of work or academic experience, and philanthropic ventures.
- Demonstrated leadership and ability to exercise good governance: Proven track record in executive positions or other boards, and evidence of self-actualization.
- Diversity: Ability to bring a diverse point of view to the board.
- Innovation: Ability to bring an innovative point of view to the board.
- Commercial and professional reputation: Could their presence on the board compromise the company’s interests for reputational reasons? Are they recognized for their integrity and high ethical standards?
- Criminal history: Have they been charged with or accused of an alleged criminal action? Have they been or caused a company to be subject to sanctions by regulators?
Conflicts of interest and availability
- Time availability: Will they be holding other positions simultaneously? If so, how many and how demanding would they be? Do they understand and are willing to commit enough time to the board’s activities? Would including your organization still be allowed by regulations, or would it exceed legal restrictions on the maximum number of positions held in administrative bodies?
- Personal connections: Are they close to or indebted to a person or institution that might have a stake in the company taking a specific turn? Are they personally involved with someone in an executive position in the company or a competitor?
- Professional connections: Are they shareholders or board members in a competing or potentially ancillary company? Could those relationships interfere with their decision making?
Depending on your regulations, policies, and needs, some answers to these questions may or may not be dealbreakers. Whatever the case, it’s important that you consider them so you can get the appropriate information and make the best possible decision for your organization.