Being invited to join a Board can generate a “warm inner glow” because it is generally a sign of recognition that you have something to offer an organisation’s Governance process.
However, it is also a very important personal step that can have consequences, in terms of you or your clients, available time and energy and possibly, in extreme situations, your personal financial liability.
Therefore without appropriate “due diligence” being undertaken before deciding to join a Board, you may find yourself in a situation that you may later regret.
Some of the key areas you will need to consider as a potential Board Member are these:
- What is Governance?
- What are the goals and values of the organisation?
- Is the organisation solvent?
- Does the organisation have an active Strategic Plan in place?
- Are there any special risks associated with the nature of the business?
- Is it clear what skills the Board is seeking from you?
- How does the organisation fit into the service delivery mix in its area?
- How does all this “sit” with what you believe you have to contribute?
Regardless of what factors motivate any person to take on a Board role, or the skill-set they may bring with them, many can find their skills not being effectively used. This can become a source of intense frustration over time.
Because you become legally responsible from the day you become a Board member, it is important that you feel comfortable about what you can contribute to the organisation’s objectives and more importantly, that the opportunity exists for you to make that contribution in a constructive way with the other Board members.
Director’s Roles and Responsibilities
Some important questions for all Company Directors & Board Members…
- Are you a Company Director of a small or medium business?
- Do you sit on the Board or Committee of a club or not-for-profit organisation?
If so, ask yourself these important questions:
- Do I truly understand my role, responsibilities and accountabilities?
- Am I fully aware of the strategic needs of our organisation?
- Do I fully understand the financial statements of our organisation so that I can make sound financial decisions?
- Do I know if our organisation is legally solvent?
- Do I adequately understand the law in respect to “conflict of interest?”
- Am I fully aware of my ever-changing legal responsibilities and governance duties?
- Do I have the necessary levels of skill, care and diligence to effectively perform my role?
If you could not confidently answer “Yes” to each of these questions…you may have identified important gaps in your competencies as a Director or Board Member and you should urgently consider filling these gaps with appropriate training and development.
There are many organisations that offer training in this area. Personally, I have completed the Company Directors Course at the Australian Institute of Company Directors. The course provided practical, easy to understand training and development in the skills and knowledge necessary for Company Director competence.
Just some of the competencies and outcomes covered in the training included:
- Understanding your duties and legal responsibilities as a Director
- Improving your knowledge and understanding of financial statements
- Learning how to identify and respond to conflicts of interest
- Minimising your personal and organisational risks
- Discussing Boardroom issues in confidence with your peers
Knowledge is power and for all Accountants and their clients, this area is one that we need to develop.
If you would like to find out about my Strategy Enabled Program, contact me to book a complimentary 45-minute complimentary assessment to find out what your firm needs to streamline for success.