Being asked to be a Director of a company can, at first glance, appear an honour. How good for our egos that someone sought us out personally to ask US to be a Director of a company but, there is always a but!
A Director is required to act in the best interests of the Company, its Members and Employees. The challenge for any Director is proving that he/she has done so. Turning up for a Board Meeting with an eye on the clock in anticipation of the Director’s lunch should be a thing of the past.
Yes, it can be an honour to be asked to be a Director but, if we get it wrong then we potentially face consequences that will impact on our professional and personal life. So, if you are asked to be a Director ensure you interview the Company just as much as it should be interviewing you.
The first question is to find out if there is an Induction Pack for incoming Directors as it should help to provide answers on basic queries to be considered before becoming a Director.
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Experience and make-up of existing Board and is there a Chairperson.
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How frequently are Board Meeting held and what type of Board Pack is sent out in advance of same.
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Are or should there be Committees in place, e.g. Audit, Risk, etc, and if so how are findings outlined and acted upon by the Board.
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What Policies are in place, e.g. Ethics & Compliance, Health & Safety, etc.
The second question is to ensure the Company operates with good governance which is actively reviewed.
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Ensure all filings in the Companies Registration Office and Central Register of Beneficial Ownership and Revenue Commissioners are made in a timely and current manner.
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Maintain proper books and records which include Statutory Registers and Financial records.
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Ensure compatibility across all documents governing the company, e.g. if there is a Shareholders Agreement or Funding Agreement with a State Body or Bank ensure there is no contradiction between the Agreement(s) and the Company’s Constitution.
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Bank mandates should be current.
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Have appropriate contracts in place, e.g. it is a statutory requirement that all employees have a contract of employment.
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What procedures are in place to ensure registration and/or renewal of IP and Licences.
Only when we understand the Company and how it operates can we then make an informed decision on an invitation to join a Board. It can take new Directors up to a year to feel he/she is part of the Board but, the duty of a Director starts from the moment he/she is appointed.
Honour or risk – you decide. Good luck!