It’s that time of the year when organisations are calling for nominations for candidates for directors.
Many organisations now have a statutory and constitution requirement that their directors not be not “fit and proper” (Sorry about the double negative).
But being assessed as fit and proper does not mean that all candidates are equal with equal skills or attributes that will make them a valued director.
The New South Wales Supreme Court is currently determining the penalties to be imposed on former directors and executives of James Hardie following the decision in April that they were guilty of their duties of care and diligence (see summary of April decision here and Business Day summary of penalty submissions here).
Paying attention to detail, commitment to devoting the required time and diligence in listening, reading and participating in board meetings should not be underestimated in the mix of the attributes needed to make a good director. Of course, financial, legal, marketing and other skills also contribute to a successful board.
Once the minimum fit and proper standards have been met, boards need to devise processes to ensure they get the mix of candidates needed to successfully contribute to the board, if elected.