Tips for selecting an independent director

Independence

Are they independent of the current directors, staff, legal advisor, members; corporation’s affairs?

Are there any conflicts of interest?

Experience

Do they have relevant industry experience or life experience?

Have they sat on other boards? Any with similar vision or services?

Can they introduce you to new networks or business contacts?

Qualifications or skills

What skills do you require? legal, accounting, compliance, investment, IT, marketing, strategic planning…

Where does their specific expertise lie and how will they add value?

Personality

Are they a leader, a strategist or a nurturing person?

Can they work effectively with a diverse group of people?

Can they disagree without being disagreeable?

Capacity

Can they devote enough time to fulfil their duties?

How many boards does the director currently sit on?

Directors oversee the business of the corporation. Each director must be personally aware of the corporation’s business and financial position. Do they have time to do this?

How far are they willing to travel?

Availability

Are they currently employed? If so, will they need to be released from regular work duties to carry out their board duties?

What happens if they change employment circumstances during the appointment?

Do they have other personal commitments that may restrict their participation in corporation activities?

Performance

If they have been on previous boards how has that corporation performed?

Disqualifiction/convictions/investigations

Have they ever been charged or convicted of an offence?

Are they banned from managing an Aboriginal and Torres Strait Islander corporation? Check the Register of Disqualified Officers available at www.oric.gov.au.

Are they an undischarged bankrupt?

Insurance

Does your corporation have directors’ and officers’ liability insurance?

Remuneration

Be clear on remuneration and expenses for directors.

Corporations come in all shapes and sizes, most directors perform their duties on a voluntary or unpaid basis. In some circumstances the members may have approved payment of a fixed annual fee or a fee for each meeting attended.

Corporations may reimburse out-of-pocket expenses incurred attending meetings or carrying out corporation business.

Cultural competence

Do they have any previous experience with Aboriginal and Torres Strait Islander corporations, people or projects?

References

After a candidate has been interviewed follow up with references. A referee could be someone they have previously served on a board with, an employer or supervisor, or a client who has used their services.

Also consider:

  • Does your new director need cultural awareness training?

Does your new director need formal training in a directors course?