Joining the board of directors for a small company can be an ego boost and financially rewarding, but it also has its challenges. Whether you join because you’re an investor representing your own financial interests or you join as someone else’s representative, taking a board seat requires good humor, strength of character, good business sense, and a solid understanding of priorities. Whatever your reasons for joining a board, it’s a good idea to take on the responsibilities and potential liabilities of board membership with your eyes open. Here is a list of 20 basic questions to ask before you join. Some are questions you should quietly ask yourself, looking for answers in meeting minutes and other board documents. Others you should ask directly of the Chair or colleagues on the board.
- What is the written objective of the organization?
- What exactly will my responsibilities be and what will the time commitment be?
- What is the compensation for board membership?
- Where can I get a copy of the most recent version of the bylaws?
- When were the bylaws last reviewed and amended?
- Are all members of the Board generally familiar with the bylaws and does the Chair keep a copy at hand during meetings? Or are the bylaws basically ignored?
- Going through the bylaws, which of the requirements in the bylaws have been fulfilled in the last two years (such as creating and adhering to a budget, having the books audited, holding Board meetings as scheduled, etc.)? Can I see a copy of the budget, audit report, etc?
- Doest the Board carry insurance?
- Is the Treasurer bonded?
- Does the Board keep proper minutes?
- For the decisions made over the past year or two, does each demonstrably support the objective of the organization?
- Do Board members routinely recuse themselves from votes if there is any sign of conflict of interest?
- Are there members of the Board who routinely fail to attend meetings?
- What is the skill set brought to the board by each member and are there any skill sets missing?
- Do Board members generally come prepared to meetings?
- What recent proposals were approved by the Board?
- What recent proposals were turned down by the Board?
- Are votes always unanimous or are there signs of healthy dissent?
- Does the Board review and meet regulatory requirements?
- Can I sit in on a meeting before joining?