Get on Board: First Step is Self-Awareness
Before you strive for a board position you need to do a self-assessment. Ask yourself if you are ready to switch your mindset from an executive role to a non-executive role. Another key question to ask is whether you feel comfortable with numbers. At the board level, you should be able to decipher the numbers and read the story behind them. Beware that there are legal liabilities also associated with the post of Independent Director.
Your next step towards preparing yourself for a board career is self-awareness. You need to explore and find out detailed information about the boards. You must carry out detailed research on the functioning of the boards, and develop an interest in serving on them as an independent director if you find it exciting and challenging.
How to start?
Take a quick look at the websites of the listed companies to see what kind of independent directors they have. Look at the profiles of the executive as well as independent directors to see if you find them inspiring. Discover why all the independent directors are with silver lining at the top. Also, examine and understand the difference between executive and non-executive directors and why independent directors need not have just functional efficiency.
What is expected from independent directors? What is the code of conduct and responsibility document of independent directors on the websites of the companies? Some model companies you can look up to are Infosys, Marico, Nestle, TCS, HDFC Bank, etc. Visit their websites, see the offer letters of the independent directors and what kind of responsibilities and remunerations are mentioned therein. Check out sections of annual reports and see the area of interest to you. Try to understand who are the key stakeholders and how the company’s annual report is addressing each one of them. Please have a look at what are the board committees and what is the profile of directors on each committee. Try to understand the functions of the board committees.
In addition to the aforementioned direct and first-hand introduction to the boards, try to gain a deeper understanding of the company’s balance sheet and its various sections. Check out who are the auditors and what comments and observations have they made before signing the balance sheet and P&L statement. Try to relate to the financial readings in different sections of the annual report of the company. You must have an eye for the numbers and you cannot afford to overlook financials under the pretext of not having an accounting background. Your commitment to numbers must be high to qualify for independent directorship.
Thereafter visit the websites of two stock exchanges, NSE and BSE, and navigate to various sections to understand what information is available on these websites about the companies. Try to understand why that information is there and the purpose it serves for the exchange, the company, and other stakeholders.
Finally, you should go to the SEBI and the Ministry of Corporate Affairs websites. Have a look at the Companies Act 2013 document and related stuff on the ICSI website too. Visit the relevant sections of the websites to learn how they assist businesses in managing corporate governance issues.
Also, explore various learning options available for independent directors as well as about data banks at the Indian Institute of corporate affairs website and explore the website of IODglobal.com.
Learn about corporate governance, ESG, CSR, and various stakeholders to which the board is answerable.
The world of boards is interesting and very inspiring for many to step into. It is very tempting to be a board member since it raises people’s social status and is quite gratifying in many ways. One should remember that independent directors are essential to the boards for two key reasons: to enhance the company’s reputation and its corporate governance standards. Keep digging deeper, learn more, and get inspired to start your board journey of independent directorship.
Note: Get support from Board Stewardship Inc. in self assessment process. We help you understand your strengths and brief you on the steps one needs to take to grab the right opportunity. Email us with the subject matter Info-Self Awareness CV, and Share your phone number for a call back on email@example.com