Choosing to become a non-executive director is not a decision that should be taken lightly; it needs care and consideration and should be well thought out. Aspiring non-executive directors should understand that to be a director is both challenging and demanding, even more so in the financial services sector, with a rigorous appointment process and high corporate governance standards applying to the sector.
The role of the director carries with it onerous duties and responsibilities and so you must be confident that you have the appropriate skills, knowledge and expertise to carry out the role effectively.
Understanding directors’ duties
Of greatest importance for any aspiring non-executive director is a solid understanding of the duties and responsibilities of the role. Directors are expected to act, at all times, with honesty and integrity, to uphold high corporate governance standards and to meet their legal requirements. Undertaking specific director training for the role is highly recommended for anyone considering taking on a directorship and for boards in the financial services sector, there are additional obligations under the Central Bank regulations.
Consider your value
It is important to ensure that you are the right fit for a board and that you know what your value is and where your strengths lie. What specialist skills can you bring to meet the needs of the board and how can you positively contribute to both the board and the organisation? Ask yourself why you should be chosen in preference to other qualified candidates and whether or not you can add real value to a board.
Getting your CV right
Your board CV should include a personal statement and should be tailored for each board position to outline what specific skills you can bring to the board in question. Focus on your key competencies and areas of speciality and provide details of relevant experience and any specific governance or director training which you may have undertaken.
If you are seeking to be appointed to the board of a regulated financial services company you need to be aware of the rigorous process involved, with candidates being assessed by the Central Bank under its fitness and probity standards and the prior approval of the Central Bank needed before a director can be appointed.
Do your research
Before joining any board, you should carry out due diligence and satisfy yourself that there is no potential for conflict of interest. Look for information on the company’s operations and review all information in the public domain. You should find out about the financial position of the organisation, its ethos and values, the dynamics of the board and how it operates and whether there is a board training and induction programme in place.
There is a lot to consider for aspiring non-executive directors in the financial services sector. Further information can be found in the Handbook for Directors of Regulated Financial Services Companies in Ireland, published by the Institute of Directors in Ireland and McCann FitzGerald.
For any aspiring director, it is important to understand that the role is one of great importance, which carries a high level of responsibility. However, while it can be very challenging, it can also be highly rewarding.
By Thora Mackey is Head of the Boardroom Centre at the Institute of Directors in Ireland.
