Know why your corporation wants an independent director
Corporations need to be clear on the reasons they want an independent director so they know what to look for in the person.
Is your corporation:
- trying to fill skill gaps in the current board? particular talents, abilities, qualifications?
- looking for someone to help with short-term projects or long-term strategy?
- looking for a different perspective or a fresh voice?
Expectations for directors
What does your corporation expect from its directors—performance, communication, behaviour, professionalism and rights?
Generally most corporations will have basic expectations like:
- follow the corporation’s rule book, policies and procedures
- be punctual and reliable
- be accountable
- come to meetings prepared by reviewing relevant papers or reports beforehand
- respect confidentiality
- respect culture
- give appropriate notice if your availability or personal circumstances change
- fulfil the duties and responsibilities of an independent director
- support other directors.
What does your corporation’s rule book say about independent directors?
Does your corporation have criteria for performance assessment during and at the end of the appointment term?
Selecting an independent director
What process will your corporation use to review candidates and make a selection? For example, will there be a nomination committee, selection panel or external advisers?
It is important to look for someone with the right knowledge, skills, qualifications and experience to complement your board. It is equally important that both parties are comfortable and confident with each other for the relationship to be effective and productive. It is best to meet in person.
Consider bringing one or two shortlisted candidates into your community to informally meet key people to ensure there is chemistry and a fit between both parties. The trip could include activities such as:
- an in-depth discussion about the organisational culture
- a visit to the corporation’s premises and community.
Related information: Tips for selecting an independent director
It’s important that you get your new director up to speed quickly so they can understand the corporation’s values and priorities, and contribute meaningfully from the start. Some vital background they need to know is organisational culture, values and working processes.
To be effective in their roles, directors need a good understanding of:
- corporate overview
- community and cultural context.
You may be able to impart some of this information in an overview document or brief but it is likely most of this will be learnt or reinforced in person or on the job.
Ideally you would have already invited your new director to your community and introduced them to key people during the recruitment process. If you haven’t done this or there is additional information to be covered you should organise an induction program. Some ways corporations have helped new independent directors are:
- creating a short video about themselves and their community
- providing access to a cultural mentor to answer any questions or guide a newcomer on cultural protocols and tips
- meetings with the rest of the board, key stakeholders such as traditional owners, corporation members and community
- meetings with key staff such as the CEO or managers, plus sessions with small groups of staff
- informal morning tea or lunch for staff and directors to share information about backgrounds, how the corporation is working, ideas for improvement etc
- an opportunity for the director to work at the front line of the corporation’s business.
Prepare an overview of your corporation
As mentioned above, you can help new directors hit the ground running by helping them understand your corporation’s history, vision and goals well before they start.
Before advertising an independent director vacancy a corporation should prepare a brief. You may decide some of this information will go in the advertisement and some may be better placed in your induction program. Suggestions for the brief include:
Your corporation’s story:
- a brief history of the corporation
- vision and goals
- business activities, key projects or services
- number of corporation members
- enterprise structure—structure of the corporation and any relationships with other entities, trusts or advisory groups etc
- current board and proposed board composition
- organisation/staffing structure and overview of key people
- the corporation’s rule book
- policy documents
- names of key stakeholders, funding bodies or creditors
- financial performance
- funding landscape
Your corporation’s context:
- who owns country
- community overview
- key people
- market overview