Questions to Ask Before Joining a Board
Due diligence questions for anyone offered a seat on a company board, covering what you would be liable for, the real state of the finances, how the chair runs the room, the time it takes, and why the seat is open.
The questions
Open any question for the note
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.
May I see the last two years of audited accounts and the current management accounts?
Why ask it
Reluctance is itself the answer. You are looking for how cash is trending, how heavy the debt is, and whether the auditors raised anything, because you will be answerable for what you approve.
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.
What are the current legal, tax, or regulatory matters outstanding?
Why ask it
Directors inherit problems that predate them, and litigation, unpaid tax, and open regulatory findings are the ones that consume board time. Ask this before you accept rather than reading about it in your first pack.
What insurance is in place for directors, and what does the indemnity actually cover?
Why ask it
Ask for the policy limit, the excess, whether cover survives after you leave, and what is excluded. Companies in difficulty are exactly the ones where the cover turns out to be thin.
What am I personally liable for in this jurisdiction, and what would trigger that?
Why ask it
Duties around insolvency, unpaid wages, and tax can attach to individual directors. If nobody on the board can describe this clearly, that itself tells you how the board views its obligations.
How many meetings a year, how long are they, and what committees would I sit on?
Why ask it
Committee work, particularly audit and remuneration, often doubles the commitment. Ask for the honest annual hours including reading time, then assume it is higher in a bad year.
When does the board pack arrive before a meeting, and how long is it?
Why ask it
A pack that arrives two days before and runs to two hundred pages cannot be read properly, which tells you whether this board genuinely expects to challenge management or to nod along.
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 is the relationship between the board and the chief executive right now?
Why ask it
The word right now matters. A board mid-way through losing confidence in its chief executive is a very different commitment from one that is not, and you should know which you are joining.
What decisions come to the board, and what does management decide alone?
Why ask it
Ask to see the schedule of matters reserved for the board. Where that line sits tells you whether you are governing or being informed after the fact.
Who controls the company, and how do the major shareholders behave in practice?
Why ask it
A dominant founder or investor can make a board advisory in all but name. Ask what happened the last time the board and the largest shareholder disagreed.
What are the two or three things most likely to go badly wrong in the next year?
Why ask it
Directors who answer candidly are showing you how risk is discussed in the room. A polished answer with no unresolved problems in it usually means the risks are not being aired.
How is the board's own performance reviewed, and when did that last happen?
Why ask it
Regular evaluation, even informally, is a sign the board takes itself seriously. Never having done it usually accompanies long tenures and unexamined habits.
How long do directors usually serve, and are there term limits?
Why ask it
A board where most members have served ten years or more tends to have settled into consensus. That is worth knowing before you take a seat expecting to change things.
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.
What is expected of me between meetings?
Why ask it
Introductions, customer calls, fundraising help, and mentoring executives are often assumed rather than stated. Establishing this early prevents a slow expansion of the role.
What would make you ask me to step down?
Why ask it
It forces a direct conversation about performance and about the exit route. Boards that have thought about this have usually thought about their own accountability too.
May I speak with two other directors and one executive on my own?
Why ask it
Separate conversations without the chair present are where the real picture appears, and the accounts of the same board often differ noticeably. Refusal is a decisive piece of information.
Doing your own diligence
Practical guidance for the conversation itself
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 auditor or company secretary, if you can
They know where the process is weak, and they are usually careful but honest about it.
Common traps
Accepting on relationships
Most people join because someone they respect asked. 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.