Questions to Ask Before Joining a Board
These are questions to ask before joining a board of directors, for anyone offered a seat on a company board, whether as an independent director, an investor's nominee or a first-time non-executive. They follow the order the decision usually takes: what the seat is and why it is open, the time and the terms, the finances, the risks and your own liability, how the boardroom works with the chief executive, and what to settle before you accept.
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The questions
Each question, and why to ask it
The seat
Why is this seat open, and what happened to the person who held it?
Why ask it
Growth, a planned retirement, and a resignation over a disagreement all lead to the same vacancy notice. If the previous director left early, ask whether you may speak to them, and note carefully if the answer is no.
What do you want from me specifically, rather than from any competent director?
Why ask it
A good answer names a gap: sector knowledge, a regulatory background, audit committee experience. A vague answer about fresh perspective often means the board wants a name on the letterhead.
Is this a seat on the board of directors itself, or on an advisory board?
Why ask it
The two are often described in the same words and are not the same job. A director normally votes and carries legal duties, while an adviser usually gives opinions with neither, so ask which one the paperwork will say.
Would I be an independent director, or would I be here on behalf of an investor or shareholder?
Why ask it
A nominee is expected to carry one party's view into the room, yet in most places the duty still runs to the company as a whole. Ask how that tension has been handled for the current nominees, and how the law treats it where the company is registered.
What does the company have to get right in the next two years, and what part does the board play in that?
Why ask it
The seat is a different job in a turnaround, a growth push and a handover from a founder. If the directors you meet give three unrelated answers, the board has not yet agreed what it is for.
Who put my name forward, and who makes the final decision on the appointment?
Why ask it
An invitation from the chief executive is not the same as one from a nominations committee or the largest shareholder. Whoever chose you is whoever the others will assume you answer to, at least for the first year.
Who else sits on the board, and how did each of them come to be there?
Why ask it
Founders, investor appointees, executives and independents each arrive with different loyalties. Counting the seats by type shows where a vote would fall before any vote has been taken.
Who controls the company, and how do the major shareholders behave in practice?
Why ask it
A founder or investor holding most of the votes can make the board advisory in all but name. Find out what the shareholder agreement lets them decide without the board, and whether they have ever overruled it.
Is a sale, a funding round, a listing or a restructuring expected while I would be serving?
Why ask it
A transaction is usually when directors work hardest and are most exposed, often inside a few intense weeks. Joining six months before one is a larger commitment than the meeting calendar suggests.
The commitment
How many meetings a year, how long are they, and what committees would I sit on?
Why ask it
Committees keep their own calendar, and audit and remuneration in particular come with their own papers. Ask a serving director how many hours last year really took, reading included, and set that beside the figure in the recruitment brief.
When does the board pack arrive before a meeting, and how long is it?
Why ask it
Two hundred pages landing two days before the meeting cannot be read properly. The timing shows whether directors are expected to challenge management or to nod along.
Which meetings have to be attended in person, and where are they held?
Why ask it
Travel can double the time a meeting takes, and some boards rotate between sites or countries. Check too whether a director may vote by video, since a company's own rules sometimes restrict it.
What is expected of me between meetings?
Why ask it
Introductions, customer calls, help with a funding round and mentoring an executive are often assumed and never written down. Have the list said aloud now: each item is easy to agree to, and together they can outgrow the meetings.
What does induction cover, and who would walk me through the business in the first three months?
Why ask it
A new director is as accountable as the others from the first vote, with a fraction of the background. Site visits, time with the finance lead and a reading list of past papers shorten that gap; a welcome lunch does not.
Is the role paid, and what expenses are covered?
Why ask it
Fees vary from nothing to substantial, and travel can be a real cost for an unpaid seat. Get the arrangement in writing along with the letter of appointment.
Is any part of the fee paid in shares or options, and what happens to them if I leave?
Why ask it
Equity ties you to the outcome, and under some governance codes a large holding counts against your independence. Vesting, leaver terms and tax all vary by country and by plan, so read the plan rules and take your own advice before counting it as pay.
Would I be expected to put my own money into the company, now or in a later round?
Why ask it
Early-stage companies sometimes hope a new director will also write a cheque, and it may not be mentioned until the round opens. Money in changes your position at the table, so treat wanting the seat and wanting the shares as two separate decisions.
How long do directors usually serve, and are there term limits?
Why ask it
Get your own term and how renewal is decided as well as the general habit. Where most of the directors have sat for ten years or more, a newcomer who hopes to change things should know that before taking the seat.
Does the company need to clear my other roles, and would this seat restrict what else I can take on?
Why ask it
Competitors, suppliers and customers on your CV can all turn into conflicts later. Check your own employment contract as well, because many employers require consent before you accept an outside directorship.
The finances
May I see the last two years of audited accounts and the current management accounts?
Why ask it
Read them for the direction of cash, the weight of the debt and anything the auditors qualified or flagged. From your first meeting you will be voting on the next set, so a company slow to share these with a prospective director owes you a reason.
How long is the cash runway, and what assumptions is that number based on?
Why ask it
Runway figures are usually built on a forecast that assumes revenue growth. Ask what the number becomes if revenue stays flat, since that version is the one that tends to arrive.
How much debt does the company carry, and how close did it come to its covenants at the last test?
Why ask it
A breached covenant can put the lender in charge of decisions the board thought were its own. Headroom that has been shrinking for several quarters matters more than the level of debt on any one date.
Was last year's budget met, and when did the board first hear that it might not be?
Why ask it
Missing a budget is ordinary. Hearing about the miss in the final quarter is the worrying version, because it shows how late management brings a problem to the directors.
What financial information reaches the board each month, and who prepares it?
Why ask it
A two-page summary leaves the board seeing only what the finance team chose to show. Find out whether the finance lead attends meetings and whether directors can put questions to them directly.
How much of revenue depends on the largest customer or contract?
Why ask it
One customer leaving should not be able to change the company's future, and sometimes it can. Where that is true, ask when the contract renews and who on the board has met the customer.
Who are the auditors, how long have they held the appointment, and have they ever raised a concern in writing?
Why ask it
After an audit the auditors often write to management about the control weaknesses they found, and that letter is franker than the signed opinion. Ask to read the latest one, and ask why if the auditor changed recently.
Are there loans, leases or contracts between the company and its directors, founders or their families?
Why ask it
Related-party dealings are common in founder-led and family companies and are not wrong in themselves. What you need to know is whether each one was disclosed, priced fairly and approved by people with no stake in it.
Risk and liability
What can a director of this company be held personally liable for, and who explained that to the current board?
Why ask it
The list differs by country and sometimes by sector, and it can include debts run up close to insolvency, unpaid wages or tax. Have a lawyer who practises where the company is registered take you through it, and be wary if no serving director can describe it.
Is there directors' and officers' insurance, and does the company also indemnify its directors?
Why ask it
These are two protections: a policy that an insurer pays out on, and a promise from the company that is only as good as its ability to pay. Read both for the limit, the exclusions and whether cover continues after you leave, and ask what becomes of each if the company fails.
Is the company facing any lawsuit, dispute or regulatory investigation at the moment?
Why ask it
Directors inherit problems that predate them, and a long-running claim or an open regulatory finding can fill the agenda for years. Ask what has been set aside for each and who is advising, so that you hear it now and not from your first board pack.
Are tax payments, payroll and statutory filings all up to date?
Why ask it
Arrears here are an early sign of cash trouble and tend to appear well before the accounts admit it. Get a yes or no on each of the three, and the date of the most recent late one.
Has any current director or officer faced a claim, an investigation or a disqualification?
Why ask it
You will share decisions with these people, and your name will sit beside theirs. In many countries the company register, court records or a regulator's list answer part of this, so compare what you are told with what you can look up.
What are the two or three things most likely to go badly wrong in the next year?
Why ask it
Put this to the chair and to the finance lead separately, then compare the two lists. A candid, slightly uncomfortable answer shows how risk is talked about in the room; a polished one with nothing unresolved suggests it is not talked about.
How does bad news reach the board when management would prefer it did not?
Why ask it
A whistleblowing line that reports to the chief executive is not much of a line. The useful details are who reads the reports, how many came in last year and what became of one of them.
Can a director take independent legal advice at the company's expense?
Why ask it
Some boards have a written procedure for this and some have never thought about it. It matters on the day you disagree with the company's own lawyers about what your duty requires.
If the company could no longer pay its debts, how would the board know in time, and who would advise it?
Why ask it
Directors' duties usually shift once a company is close to insolvency, and the rules on trading past that point differ from country to country. A board that has talked through where its own line sits is safer to join than one that treats the subject as alarmist.
The boardroom
How would you describe the relationship between the board and the chief executive at the moment?
Why ask it
The timing is the point of the question. A board halfway through losing confidence in its chief executive is a different commitment from a settled one, and a new director can find they were recruited to tip that vote.
How many chief executives and finance leads has the company had in the last five years?
Why ask it
A run of short stays in either chair is a pattern to have explained, most of all a finance lead who left around a year end. Ask why each one went and which of today's directors were on the board at the time.
How does the chair handle a director who disagrees with the chief executive?
Why ask it
Ask for a real example from the last year. Boards that cannot recall one either have no disagreements, which is unlikely, or do not surface them, which is the actual risk.
What decisions come to the board, and what does management decide alone?
Why ask it
Many boards have this written down, as a schedule of reserved matters or a delegation of authority, so ask to read it. A list that leaves borrowing, large contracts and senior hires to management means the board hears about them afterwards.
When did the board last turn down a proposal from management, and what happened afterwards?
Why ask it
A board that approves everything is either very well served or not really deciding. The aftermath is the telling part: whether the proposal came back improved, or the executive who brought it went quiet.
Who sets the agenda, and how would I get an item onto it?
Why ask it
Agendas built entirely by the chief executive tend to fill with reports and leave strategy for the last ten minutes. A clear route for any director to add an item is a small rule that says a lot about who owns the meeting.
Do the non-executive directors ever meet without management in the room?
Why ask it
Private sessions are where doubts about the chief executive can be raised before they harden. If they happen only in a crisis, calling one becomes a signal in itself, which is why regular ones work better.
How is the chief executive's performance reviewed, and who decides their pay?
Why ask it
Appointing, paying and if necessary removing the chief executive is usually the board's job and nobody else's. A review that the chair handles alone over dinner leaves the other directors accountable for a judgment they never saw.
Is there a succession plan for the chief executive and for the chair?
Why ask it
In plenty of companies the plan is a name in one person's head. That is workable until somebody leaves suddenly, at which point the search lands on whoever is on the board, including you.
How are the minutes written, and is a director's dissent recorded if they request it?
Why ask it
Minutes are the record everyone falls back on when a decision is questioned years later. If you argued against something you will want that written down, so find out now whether this board does it.
How much do directors see of the business outside the boardroom?
Why ask it
Directors who only ever meet the top team know the company through its slides. Visits to sites, time with customers and a standing invitation to speak with staff give you something to test the papers against.
How is the board's own performance reviewed, and when did that last happen?
Why ask it
The useful half of the answer is what changed afterwards: a committee reshaped, shorter papers, a director not put up for another term. A review that produced nothing, or has never been held, leaves each director's contribution judged by nobody.
Before you accept
May I speak with two other directors and one executive on my own?
Why ask it
Choose them yourself if you can, and put the same two or three questions to each. Where their accounts of the same board differ, you have the subject of your next conversation with the chair.
May I read the last three sets of minutes and one complete board pack before I decide?
Why ask it
Minutes show what the board spends its hours on, and a full pack shows what it is given to work with. Expect to be asked for a confidentiality agreement first, and to have anything price-sensitive or legally privileged taken out.
May I sit in on a meeting as an observer before the appointment is made?
Why ask it
An hour in the room shows who prepares, who speaks and whether the numbers get questioned. Not every company can allow it, and a listed one handling price-sensitive information may well say no, so have a smaller request ready, such as joining the directors for the dinner beforehand.
What happens between my saying yes and the appointment taking effect?
Why ask it
There may be background checks, a shareholder vote, a regulator's approval in some sectors and a filing that puts your name on the public record. Knowing the sequence tells you the last date on which you can still change your mind quietly.
What would make you ask me to step down?
Why ask it
Asked before you start, this is a conversation about expectations; asked two years in, it is a dispute. A useful answer names specifics, such as missed meetings, a conflict that develops or a change of shareholder, and says how the last director who left was told.
If I ever needed to resign, what notice applies and what would be said publicly?
Why ask it
Leaving a board is harder to do well than joining one, especially in the middle of a problem. The letter of appointment should set out the notice, and it is fair to ask how the last departure was announced.
What would you tell a close friend who had been offered this seat?
Why ask it
People drop the recruiting voice when the question is framed around someone they care about. Listen for the first hesitation, because that is usually the thing nobody had planned to mention.
Doing your own diligence
Practical guidance for the conversation itself
Know which kind of seat you are being offered
A director of the company
This is the seat most of the list assumes: a vote, a named place on the public record and duties owed to the company. Those duties are set by the law of the place where the company is registered, so have someone who knows that law explain them before you sign.
An advisory board member
Advisers are usually asked for introductions and opinions, with no vote and no part in approving the accounts. The label is used loosely, though, and in some countries a person who acts like a director can be treated as one, so ask what the letter will call the role and what you would be asked to decide.
An investor's nominee
You hold the seat because a shareholder has the right to fill it. Settle in advance what you may share with the investor who appointed you, and what happens to the seat if their stake changes, because both are easier to agree before a disagreement than during one.
A board observer
Observers attend and read the papers but do not vote. It can be a sensible first year with a company you are unsure about, provided the terms on confidentiality and on leaving the room for sensitive items are written down.
Documents to ask for before you accept
- 1The last two years of audited accounts, plus the most recent management accounts and cash forecast.
- 2The last three sets of board minutes and one full board pack.
- 3The schedule of matters reserved for the board, and the committee terms of reference.
- 4The directors' insurance policy and the deed of indemnity, not a summary of them.
- 5The letter of appointment, setting out term, fees, expenses, and notice.
- 6Any current litigation or regulatory correspondence, in outline if not in full.
Who to speak to, and separately
The chair, alone
You are assessing how they handle dissent and whether they can describe the board's weaknesses. Chairs who only sell the opportunity are usually recruiting an audience.
Two serving directors, without the chair
Ask each what they would change about how the board works. Two answers that differ sharply tell you more than either answer alone.
One executive below the chief executive
They will tell you whether the board is seen as useful or as a reporting burden, which is a fair proxy for whether it functions.
The company secretary or the auditor, if the company agrees
Whoever writes the minutes can usually say which papers arrive late and which decisions get rushed. An auditor may decline to talk to someone who is not yet a director, in which case ask the audit committee chair what the auditors raised last year.
Common traps
Accepting on relationships
Many seats are accepted because someone the candidate respects did the asking. That is a reason to look harder at the finances, not less, because your name will be on the filings either way.
Underestimating the bad year
Board work is light until a crisis, a departure, or a transaction, and then it can take several days a month. Judge the commitment by that year, not the quiet one.
Treating the seat as prestige
The title is minor and the duties are real. If you would not be willing to read every pack in full, the seat is not a good fit whatever it does for your profile.