Earlier this year ICSA published an update to its guidance note Joining the right board: due diligence for prospective directors. The revised guidance is intended to encourage and assist potential directors to carry out their own due diligence on the company and its board in order to make an informed choice as to whether they are suitable for the role. Although the guidance is directed at non-executive directors of listed companies, elements of the note are worthy of consideration by all prospective directors. The guidance suggests that prospective directors study: the company's business model, its governance, the market environment and dynamics, recent operational performance, strategy, risks and uncertainties, sustainability and financial performance.
It also recommends that:
- Prospective directors should look at the company's annual reports, website and press articles.
- They should, if possible, meet the entire board. It may also be beneficial to meet senior employees and, where appropriate, external advisers to the company.
- On a more practical note, potential directors should also check whether they would be able to attend most, if not all, of the forthcoming planned board meetings in the first year of appointment.
The guidance note can be found on the ICSA website by clicking here.