Key Questions You Should Ask

Board Search Start-Up Questions

board-search-questionmark2.jpgThere are many key questions that need to be answered prior to commencing a search. These are some high-level discussion questions we would have with the CEO and other individual board members. 

For public companies, some of these questions are answered in the public disclosures.

 

Questions for the CEO

 

Role of The Board 

  1. What do you view as the overall charter of the board?  What elements of that charter do you consider most important?
  2. What other roles or support would you like the board to provide?  Is there anything you have seen on other boards that you would like to see incorporated at your company?
  3. How well does the current board fulfill these roles?  Are there any strengths or weaknesses?
  4. Are there any major changes you would like to see in the role of the board?
  5. Do you have any mechanism for formally measuring board performance?  If so, what?  If not, is any such mechanism under consideration?

 

Board / CEO Interaction

  1. How and how often do you typically communicate with various board members?
  2. What type of information is generally provided to board members?  By whom?
  3. Is there much communication/interaction among various board members between meetings that do not involve you?
  4. What involvement do other senior executives typically have with the board or specific board members?

 

Composition of the Current Board

  1. What formal and informal roles do each of the current board members play?  What unique or consistent perspective or orientation does that board member bring?
  2. Which standing board committees work best/worst and why?  Are any new committees needed?
  3. What informal alliances currently exist?  Are they a positive or negative force?
  4. What will you most miss because of the retirement/resignation of each departing board member?
  5. Do you believe there has been any expertise, background, geographic need, or other orientation missing from the board?  If so, what? 
  6. Do you anticipate any changes in the board size?  Location or number of meetings?

 

Board Culture

  1. Outline the key elements of the board culture; is it changing?
  2. Are there any areas where the board culture significantly differs from your historic corporate and management culture?  Is it consistent with the somewhat more disciplined/accountable culture shift you are establishing?
  3. What cultural elements (if any) would you like to see change?

 

Corporate Challenges

  1. What key financial, market, geographic or other goals/objectives has the board established for the next ten years?
  2. What are the primary obstacles that face your company in accomplishing these objectives?
  3. Are there any new competitive, environmental or other factors facing or likely to face your company over the next decade?
  4. What one or two legacies would you like to leave as a result of your leadership?

 

Board Additions

  1. In light of the above, what specific backgrounds or expertise would you like to see added to the board?  Is there a priority or timing issue associated with any background?
  2. Have any specific individuals been identified by you or other board members as perspective directors?  If so, how do you feel about these suggestions?
  3. Are there any biases or "hidden agendas" we should be aware of?
  4. What do you suggest in terms of an overall timetable for this project?

 

Board Compensation Structure

  1. Are there any compensation or director perquisites beyond those outlined in the proxy statement?
  2. Have you typically discussed, in advance of someone joining the board, under what circumstances they may be asked to resign as a director?

 

Questions for Individual Board Members

board-search-questionmark.jpgEnvironmental Trends and Pressures

  1. What are the primary competitive business forces that the Company will be facing in the next five years? 
  2. Who are the strongest competitors in your industry? 
  3. What are the strengths of the Company?
  4. What are the areas that need to be emphasized to be further improved? 
  5. What are the primary regulatory issues facing the company, nationally, as well as state and local? 
  6. What are the company’s vulnerabilities? 

 

Board Member Background Discussion

  1. What is your background? 
  2. How long have you served on the board?
  3. Do you have a particular area of expertise utilized by the board? If not, why not

 

Role of the Board

  1. What do you view as the overall charter of the board? What elements of that charter do you consider most important? 
  2. What other roles or support would you like the board to provide? Is there anything you have seen on other boards that you would like to see incorporated at the Company? 
  3. How well does the current board fulfill these roles? Are there any strengths or weaknesses? 

 

Board Culture

  1. Outline the key elements of the board culture; is it changing? 
  2. What cultural elements (if any) would you like to see change? 

 

Board Additions

  1. In light of the above, what specific backgrounds or expertise would you like to see added to the board? Is there a priority or timing issue associated with any background? 
  2. Have any specific individuals been identified by you or other board members as Prospective directors? If so, how do you feel about these suggestions?

 

Search Start-Up Discussion Questions

  • Does your executive team and your entire board know of the search(es)? 
  • Will there be a formal nominating committee of the board for new directors?
  • Which other directors should we speak to regarding the searches?
  • How do you determine board size?  Full board discussion or CEO/Chairman decision?
  • Have you created a template or experience specification for the types of people that will add the future value needed by your board?
  • Do you have members of the board now who add less value than they once did?
  • How important are minority and/or female board representation?
  • How involved have your board members been with the management team?
  • Is your schedule of meetings set for the next year?  What locations?
  • Would you restructure meeting dates to attract/facilitate a particularly appealing new director?
  • On average, how many days per month/per year did your directors devote to board activities?
  • board-search-checklist.jpgDo you have any sort of board term policy or term limit policy?  Is it structured to be overlapping?  Is it developed in conjunction with your anti-takeover provisions?
  • What materials are delivered prior to meetings?  Who prepares them?  How far in advance are they received?
  • What stock ownership requirements do you have for directors?
  • What is a typical agenda/schedule for your meetings?  Who determines?
  • Do your outside directors ever meet separately?
  • What comprises your director compensation: Annual retainer, per meeting fee, per committee fee, stock options, deferred compensation, other. 
  • Are your directors evaluated in any way? Attendance, committee leadership, other?
  • Do you have a mandatory retirement age for directors?
  • Is there a policy regarding continuation on the board if the director’s “platform” or position goes away?

 

Additional Resources

Contact us for additional questions & resources, such as 

  • Key essential documents before a search
  • The board skills matrix
  • Board member position specification 
  • Chairman, Lead Director, President and CEO role definitions
  • Additional Questions to ask about a company
  • Growth Stage Board Search

Are you thinking of recruiting a board member?

We also offer selected additional key resources, such as board member job specifications, Chairman, Lead Director and CEO role clarifications? (See Additional Resources)

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