I know, I know, you’re eager to join a NFP board.
But before you say ‘yes’ straight away to the board that’s just offered you a position, have you done your due diligence?
What is due diligence?
The dictionary definitions go something like…
• Action that is considered reasonable for people to be expected to take in order to keep themselves, others or property safe.
• The details examination of a company and it’s financial records, done before becoming involved in a business arrangement with it.
You must ascertain whether the board role is going to be a great decision for you, the board and the organisation. Accepting a board role is a long term commitment so ensure you understand the expectations, role and people so it’s a good fit for you.
Here are 10 questions to ask a prospective board to help you understand whether the board position is a right fit for you.
Ready for it? Here we go.
1. What are you looking for in a director?
Does your knowledge, skills, networks and time available fit with what the board is looking for? You want to make sure this is a long term commitment and confirm you are not only a good match, but the perfect one!
2. What’s the commitment expected?
A board will have Terms of Reference or Board Charter which defines the roles, responsibilities and processes of the board. This might be a good place to start researching and ask any questions you may have. You may also want to see a copy of the constitution too. Think about the time involved, meetings and preparation, any networking or fundraising you need to commit to and get a sense of the annual cycle of activities.
3. Tell me about the current directors – what are their roles? How long have they been on the board?
You want to get a good sense of the culture of the board. Are the current board directors active, interested and involved? Do they turn up on time and prepared for the meeting? Are they open to new ideas? Are they people you respect and maybe even admire? You will be working pretty closely with your fellow board directors so check them out and make sure it’s a good fit.
4. Does the organisation have a strong vision for the future and a strategy to achieve it?
Does the organisation know where it’s headed? Does it have a clear picture of where it wants to be in 1, 5 or 10 years time? What’s the current strategy to get there? You may also want to see the minutes of previous meetings to see if the discussions at meetings are aligned with the organisation’s vision and strategy.
5. What’s the current financial position of the organisation?
You will want to see the financial statements to see the financial health of the organisation. You want to make sure the organisation is solvent, has stable income streams and a clear budget, and have processes in place to review the financials regularly. You may also want to confirm what checks and balances are in place to ensure the validity of the information that is being reported to you as a board director.
6. Does the organisation have the appropriate insurances?
This can include insurance for the organisation as well as insurance to cover you as a director including Directors liability insurance, professional indemnity or fraud insurance. Confirm what levels of insurance is offered to board directors and if you must contribute to helping pay for it.
7. What’s the relationship between board directors and their stakeholders?
Organisation employees, politicians, funding bodies and end users – there are many types of relationships that board directors might have with the stakeholders of the organisation. Who are the stakeholders and what are the expectations of each of these relationships?
8. What’s the induction process for new board directors?
Ok, so you’re getting closer to making a decision, what’s the next steps look like? You will want access to all the board documentation, meet the staff and perhaps tour the facilities. If you’re a younger or less experienced director, you may want to be teamed up with a board mentor if possible to debrief board meetings to help expedite your learning journey.
9. Is there an evaluation process in place?
How do board directors evaluate their own performance and as a team? Is there a culture of learning and improvement? To be honest, some organisations might not have this in place, but it might be a great point to highlight in your discussions with them.
10. What resources are there to support me as a board director?
Training – formal or informal, ongoing mentoring, staff support or an honorarium may be offered to support board directors in their role. It’s a good idea to know what support is offered from the start and how it can be best used to support you in the role.
What other questions could you ask?
This list is a good starting point and definitely not an exhaustive list. You may have other questions depending on the organisation or the role. The point is not to take on a board role lightly, take your time and consider if it’s right for you. This will benefit you and the board in the long run.
Now over to you: Does it seem like the organisation is a fit? What are your thoughts? I’d love to hear them!