Guiding boards. Growing business.

People Considerations when Creating a Board

By Norma Ndhlovu

The key to any successful business is the team that drives it forward.

In his book The Laws of Extreme Business Success, Carl Bates addresses the Law of Effective Teams by saying; “Extreme Business Success occurs in an environment where a team of loyal and supportive people with the appropriate energies and skills collaborate to achieve the business purpose. Knowing how to choose the right person for the job, and ensuring that your best people stay with you, is paramount for Extreme Business Success.”

With the above quote in mind, who is in the team on your board of directors? Maybe you are part of a privately-held business that finds itself still in the throes of setting up a board of directors.

Here are some key personal characteristics to look out for when creating a board or appointing new directors:

  • Skills and abilities: Consider the gaps and skills that the business lacks before appointing directors. The board is responsible for providing the business with direction and leadership to achieve the company’s long-term success goals. Therefore, potential directors should be able to bring new and specialist skills and expertise or a deep understanding of the business’s operational environment in order to realise growth and success.
  • Independent thinking: Directors need to act in the best interest of the business, ask the tough questions and offer sound advice without bias. It is essential that they have an independent mindset to constructively challenge the status quo and support the business, and have an objective point of view on the running of the business and its strategic direction. As per Traversing the Avalanche, Bates shares, “One of the key principles of an effective board is the right balance of ‘inside’ or executive directors and ‘outside’ or independent non-executive directors. This ensures that there is a balance across the board and encourages independent thought that will sufficiently challenge the business and improve both its governance and performance.”
  • Diversity across all aspects: Having people with different viewpoints is important for sound and innovative strategic decision making. Look for unique individuals who bring different talents and characteristics to the table. Though the norm is to usually appoint directors with the same industry experience as the organisation, diversity of experience in other sectors adds value and offers unique perspectives and ideas.
  • Governance knowledge: Directors need to understand the controls and statutory frameworks that the business operates in so that they can align these to the interests of the board, management, shareholders and stakeholders. Good corporate governance aids in enhancing shareholder and investor value, building strong brand reputation as well as increasing the effectiveness and efficiency of business operations among other things.
  • Capacity and commitment: Directors must have the capacity to devote their time to the organisation. They will be expected to spend time preparing for and attending board meetings and could also be asked to serve on additional committees. They must furthermore be committed to the vision of the organisation and its continued well-being, as well as to their own growth.
  • Personality profile: An individual’s characteristics and personality traits can have a great impact on their effectiveness in working within a team. At Sirdar, we believe in having a board with balanced energies and make use of the leading team-profiling tool, Contribution Compass, to determine where board members’ natural energies lie. With complementing energies, the board will be more well-rounded.

If the person you are looking to appoint has these characteristics, you are already halfway to building a high-performance board.