Thinking of Becoming a Director?

As part of our executive search work we spend a lot of time chatting to senior leaders. Many of them are starting to think about how to give back and share their knowledge, experience and accumulated wisdom for the benefit of other people and organisations. We often get asked about what the process looks like in moving from leadership to governance.

Many senior leaders have gained a wealth of experience and expertise in their field and then consider taking on additional responsibilities by becoming a company director.

This is a significant decision that can have a profound impact on your career and the organizations you serve. Here are some tips to help you prepare for this role and make the most of your governance responsibilities.

Understand the duties and responsibilities of a director

Before you commit to becoming a director, it is crucial to understand what risk you may be taking on and the responsibility that comes with this. Directors have a fiduciary duty to act in the best interests of the company and its shareholders. This means that they must make decisions that are financially sound, responsible, and ethical. They are also responsible for overseeing a company's management, monitoring performance, and ensuring compliance with laws and regulations.

Learn about corporate governance best practices

A lot of emerging (and some experienced!) directors still blur the boundaries between management and governance. Understanding this distinction is essential. Corporate governance refers to the set of processes, policies, and laws that govern how a company operates. As a director, it is essential to understand corporate governance best practices and ensure your company follows them. This includes understanding the principles of transparency, accountability, and fairness, as well as how to mitigate risk and ensure compliance with laws and regulations.

Develop strong financial acumen

Directors are responsible for overseeing the company's financial performance and ensuring that it is sustainable and profitable. To do this effectively, you need to have a strong understanding of financial concepts and how they relate to company operations. This includes understanding financial statements, budgeting, forecasting, and cash flow management.

Build a strong network

As a director, you work with other leaders and stakeholders to make important decisions about a company’s future. Building a strong network of contacts can help you to stay informed about industry trends and best practices, and to leverage the expertise of others when making strategic decisions. It is wise to also ensure diversity and a breadth of experience exists within your own network.

Seek out training and development opportunities

Becoming a director requires ongoing learning and development. Seek out opportunities to attend training sessions, workshops, conferences and other professional development that will help you to stay up-to-date with the latest governance practices, industry trends and human resource tools and practices.

Consider joining a board as an observer or developing director

Before taking on a full-time director role, consider joining a board as an observer or ‘developing’ director. This will give you the opportunity to learn from experienced directors and observe governance practices in action. Many developing directors also take on voluntary roles on not-for-profit or charitable boards as a way of giving back whilst also developing governance capability.

Overall, becoming a company director can be a rewarding and fulfilling experience, but it also comes with significant responsibility. By taking the time to understand the role and develop your skills and expertise, you can make a positive impact on a company's success, share your knowledge and experience and help to create a more sustainable and responsible business environment.