Like most things in life - it depends on what an aspiring director wants. "Merely" being a director is insufficient an ambition to define how to become one. Here are a few contexts that should vary your strategy.


1. What do you want to become director of? If you "just" want to become a director, then target a company that nobody else wants to be part of, contact the chairman, introduce yourself and outline how you can help. Ask if he would support your nomination as director and be prepared to accept low director fees. Better still, find someone to recommend you to the chairman. However, you might find this ambition and strategy will get you into "difficult company." (pun intended) Furthermore, being associated with a "basket case board" may impede your ability to leverage your experience to bigger and better corporations - so be warned.

2. Do you want to become a director in a publicly listed company, a private company or an NFP? Each has different requirements. If you are chasing to be a director in a publicly listed company then, all other things being equal, you will need 1) to be able to demonstrate specific skills that will add value to the corporation, 2) you need a strong testimonial base, 3) a clean reputation, and 4) you need to be electable at an AGM. Each of these has dimensions and issues (and strategies) that are too numerous to elaborate on here.

If you have a target corporation in mind, and you know the fund manager of one of its significant institutional investors, go and have a chat and convince him/her of the value you can add to their investment by becoming a director of the target company. Ask him/her to sponsor your nomination to the board.

If you want to join a private corporation's Board, you need to either 1) know the key shareholder/s, or 2) know the chairman or one of the more powerful directors, or) be known to the corporation through work you have done for them (e.g. legal, accounting, consulting, technical, etc) and have that work regarded VERY highly by them, and that part of your skill being an ongoing requirement for the corporation.

Also, it helps in all of these instances if you know and get on well with the CEO.

If you are targeting an NFP, depending of course on the NFP and its status and prestige; you need a clean reputation, some demonstrated skills that will be of use to the NFP and a preparedness to work hard for many years for no financial return - but you may feel profoundly content with your achievements (that's your reward).

3. If you want a directorship/s because you crave wealth - there are better and less complex ways to make money.

4. If you want a directorship/s because you crave power - be warned. There is always someone out there bigger and meaner than you. Legal, regulatory and corporate guildines have a way of reining in those directors with delusions of grandeur.

Bottom line: be crystal clear about why you want to pursue a directorship path and what type of organisation you want to be director of. Go and speak to some directors / chairmen / CEOs of that/those types of organisations and ask their advice about how to "get into the game".

It depends on how you define "Diverse".


If members are diverse in their skills, then the board may/could/should utilise those skills for the benefit of the organisation.

If the members have diverse ethical standards, then the Chair should make clear what are the Board's ethical expectations and standards.

If members have diverse opinions on which way the organisation should go, then those various opinions can be tested and scrutinized and voted on.

However, if the members have diverse opinions regarding the organisation's objectives, then these need to be clarified and, if necessary ratified by vote or communication to members/shareholders.

To offer a panacea for diversity is problematic as not all "diversity" can/should be handled in a generic fashion.

There are multiple dimensions at play here. First and foremost, there is an abundance of research that demonstrates the subjectivity of management (and directors). To think that management always acts in the best interest of the corporation or the shareholder is very naive. Therefore, for a director to accept at face value anything that comes from management that has an impact on the Board's core accountabilities and responsibilities, is problematic and risky.


A Board that has experienced consistent behaviours from the executive team that has demonstrated veracity, honesty and openness is a reasonable basis upon which to "trust" management - to a point. On the other hand, if management is new, unproven or has previously been less than truthful or accurate (or incomplete) then the director has a responsibility to question and probe.

A fact about directorship is that information, although technically accessible to the Board, is not practically accessible - management will always have access to more information than directors. We all acknowledge that the building of a strategic plan, for example, is embedded with multiple informational inputs along the journey of its construction. Very few of these informational inputs and assumptions are brought to the attention of directors nor are all the assumptions surfaced and tested. Therefore, it is comon for directors to be forced to resolve, decide or adjudicate on matters where full information and understanding is lacking.

Futhermore, as has been flagged, some will interpret the questioning of executives as a display of no confidence or no trust - both are potentially problematic for the operations of the board and the relationship between directors and management.

The director, before a probing and potentially threatening question is asked, must ask him/her self, "Is the answer to the question material to the Board's responsibilities and required outcomes?" If not, then why ask it? If the situation in question was not affected by whether the Counsel was sacked or resigned, then why ask it? On the other hand, it may be entirely relevant (if for example he/she was sacked because they were offering a dissenting view.)

If the information is not material but is known to be false, then a quiet word to the executive or the chairman requesting that the issue be clarified "for the record" might be a more satisfactory way of handing this matter.

Organisational Performance is the principal objective of the board while Compliance is a required and necessary enabler.


If the Board can't ensure Compliance with all required legislation and regulation, then it's not fulfilling its role. It needs to get more expertise or personnel or both.

If it's not ensuring optimal performance, it is probably underskilled.

In any case, the Board's responsibility is to do both and do both adequately - it's not a trade off or a balancing act. The Board is afterall, being held accountable for both performance and compliance.

One engenders the behaviour that one measures! Measure the wrong thing and the outcome will be wrong too.

It largely depends on:


1) whether the entity being controlled is a listed corporation or not?

2) who is concerned about the influence of the "controlling" shareholder?

Strictly speaking, the shareholders (controlling or not) should determine corporate outcomes (using the principles of Shareholder Metrics - i.e. find out what the shareholders want and focus the corporation on delivering those outcomes against the dimensions of value, benefit, growth and risk.) This of course is if you accept the Property view of the corporation (i.e. the organisation is owned by its shareholders and all that the corporation does is for the benefit of those shareholders.)

In that context, the CEO is being paid to satisfy shareholders so if he/she is the one upset by the controlling shareholders' focus, then he/she needs to reconcile his/her relationship with those shareholders and understand the principles of Agency Theory (and practice).

If the entities who are "upset" are other shareholders, then they should meet with the controlling shareholder to determine areas of common ambition (i.e. corporate outcomes) and reconcile any differences.

If it is the board that is having a problem with the controlling shareholder, then 1) same comments apply as for the CEO; and 2) the board should undertake a Shareholder Metrics assessment to identify the corporate outcomes expected by all shareholders. If those expectations differ from the controlling shareholder, then remedial strategies (and probably a whole lot of two-way communication) may be required. The board will, with Shareholder Metrics, be able to mount an argument that it has an obligation to all shareholders and not just the controlling shareholder. Without the metrics, it just becomes a game of testosterone and power.

To some extent, the greater the "distance" between decisions made within the organisation from the board, the greater the need for independent audit.


The greater the volume of decisions made within the organisation by management without board consideration, the greater the need for independent audit.

The greater the volume of funds transacted by the organisation, the greater the need for independent audit.

The greater the opportunity for personal gain by employees (money, product, favours, etc), the greater the need for independent audit.

The greater the corporate risk incurred by management/organisation without adjudication by the board, the greater the need for independent audit.

The greater the role of management subjectivity in determining what's "good for the organisation" and/or shareholders without recourse to board deliberation, the greater the need for independent audit.

The greater the chance that an operational breach at grass-roots levels of the organiation causing an organisational breach of legislation or regulation, the greater the need for independent audit.

Much research has established categorically that people act subjectively, not through any malicious intent, but through the filter of personal benefit and risk aversion. Therefore, for directors to rely solely on internal reports without validation and substantiation is high risk behaviour.

One definition of "ethical" is "...in accordance with principles of conduct that are considered correct." If therefore a company resolves to be law abiding, for example, then technically everything that is illegal is therefore unethical.


The establishment of an ethical standard is relatively "easy". Living up to it is a whole other challenge.

The problem of "ethics" and an unequivocal statement of acceptable (ethical) behaviour in the business is the greyness surrounding market and corporate behaviour - it's the balance between performance and morality - and both get stretched in difficult or desperate circumstances. Some of these situations have been highlighted in previous postings but a few other examples are worthy of consideration:

1. The company has an opportunity of taking a weak competitor out of the market by keen pricing for a prolonged period. This action will help the corporation achieve its corporate objectives but in the process, will close down the competitor, put 350 people out of work in a single-industry town. What does the board do?

2. An underperforming company has an ethical and transparent policy for the conduct of its business in its home market. It has just landed a huge profitable export order. To secure the order it must pay the baksheesh asked for by the intermediary in the country of export. Does the board pay it?

3. Your company provides multi-use products to industry. A client has placed a huge order that enables you to exceed budget in a tough trading environment. The client produces chemicals. You KNOW (because the client told you) that the client's use of your product will be applied to weapons that are currently in use in a war zone where the use of those weapons has caused huge numbers of collateral deaths. Do you agree to sell your goods/services?

4. Your firm has a factory in a location where it employs 400, largely Evangelical Christians. It wishes to expand but there is no available labour. Twenty technically suitable fundamentalist Muslims wearing traditional dress apply. The wearing of their attire does not impact on their ability to undertake their proposed role. Do you hire them?

5. Your company provides IT systems. You secure a very large and profitable order for new IT systems that track individuals and, through an innovative GPS system, identifies the exact location of the individual at any time. Your client is the leadership of a Sadam Hussein-type autocracy. Do you sell it to them?

If you can't answer these questions, then I doubt whether an effective ethical standard can be developed that will apply in every circumstance.

As with most things of this sort, it depends on the context. Sometimes it will be a procedural issue that contributes to dysfunction and at other times it will be behavioural. IMHO, there are no universal truisms explaining board dysfunction.


Having said that, there are many reasons that boards are dysfunctional or sub-optimal.

1. Certainly, if the business of the board is not managed well, then it will be harder for appropriate decisions to emerge. This mismanagement may be a product of the way the board does its business (i.e. process), or may be a product of the way the Chairperson manages business (i.e. leadership). In either case, it may be a hurdle to effective decison-making.

2. Directors, like the managers they oversight, are human beings too and suffer from similar subjective perspectives. Directors may fear the loss of their incumbency, the loss of status, the loss of their entitlements, the loss of their relationships within the company, or the loss of their ability to leverage their career into more prestigious boards. All of these very human attributes may/will impact and sometimes impede rational board-level decision-making.

3. Inadequate skills will impede decision robustness on certain issues. It is unlikely, for example, that a board that has never undertaken an M&A will have suitable M&A experience on the board (they may be lucky and have those skills but it is unlikely to have been a part of the director search criteria). Therefore, in all likelihood, the board may rely more on management recommendation than they would otherwise, and they may not have the skills to know which critical questions to ask.

4. The other reality is that a board is unlikely to remain "dysfunctional" on all things at all times or to make optimal decisions about all things at all times. Like most things, the effectiveness of the board will be judged on its ability "on balance" and certainly on the big issues. If there are a lot of poorly resolved "big issues" then the board will be probably deemed as ineffective or poorly performing.

5. Then there are those directors who sometime erroneously make the assumption that "because it's not their specific responsibility", someone else will "look after it". That is the problem with many group structures: unless responsibility is explicity assigned, then a chance of getting an optimal outcome is unlikely.

6. It terms of "Boards that couldn't think straight", my experience is that this occurs on so many different levels and I've seen all the errors made: ignoring shareholders; accepting the CEO's vision when it wasn't in the investor's interest; poor CEO appointment practices; lack of CEO briefing of organisation required outcomes; poor operational decisions; no oversight of strategic plans; poor marketing; poor crisis management; etc.

The board and its directors have certain specific accountabilities and responsibilities. As a minimum, directors should be able to deliver these at a level that is far above average. The board should then have the wisdom to know when it has outreached its existing skillsets and when it needs to call in independent expert opinion to assist them in making suitable decisions. Instead of doing this, many board merely accept management's recommendation with little interrogation or understanding.

Although only a broad generalisation, I have found that "managers" are often people entrusted to follow a path already defined; while "leaders" are those who define the path....and both often overlap.

On merging two corporate cultures, the personnel of both parties will try to hang on to their own practices for a range of reasons. This may or may not serve the new entity.

Therefore, a way to break the "territorial" approach that is inevitable (my experience in hundreds of corporations), is to create "neutral" territory that all personnel can buy into.

The way to do this is:

1. As a group, determine the new organisation's KPOs (ensuring of course that these KPOs are the ones that will be endorsed by the Board and the corporation's shareholders.

2. Once KPOs are resolved, as a group, define the Newco's market from which those KPOs will be delivered.

3. Once the market has been defined, determine the product/service mix that will extract those KPOs from the market.

4. Once the product/service mix is resolved, determine channels (i.e. how the products/services will get into the market, how they will be supported and what the communication/promotion strategy will be to attract the target consumers.

5. Then, and only then, can you resolve what sort and how many people you need to deliver the agreed KPOs. That will/should also enable you to determine what sort of culture and organisational values and ethics are required to deliver those KPOs.

6. Simultaneously with #5, you can consider what systems, I.T. and processes are required. These are an outcome of the previously made decisions.

7. Once the preceeding has been resolved, the group can then determine the "corporate envelope" required to make it happen: management levels, organisation structure and corporate enablers. (Note that 'Structure' is a "lower-level" decision)

8. When you throw all of those decisions into the appropriate matrix, you get a range of outcomes - these must equal or exceed your agreed KPOs. If they don't, your groups need to rework some of the decisions they made - starting with the most recent and working "up" the decision hierarchy until effort = KPOs..

In my experience, merging two cultures is difficult and all the harder when there isn't a logical decision hierarchy. By using this process, you will get agreement on corporate KPOs for the Newco, and all else follows from that.