Board composition is a complex topic and there is no ‘magic formula’ for getting it right. To help you consider your board composition from some fresh, and hopefully enlightening, perspectives, we have compiled this list of questions to help you think about the board and its members. The questions will help even if you are an experienced director or chair and have been part of this board for many years.

The questions below provide comprehensive coverage across:

  • Assessing board effectiveness
  • Providing strategic insights
  • Meeting stakeholder expectations
  • Building relationships
  • Supporting executive development
  • Enabling succession

The questions are designed to prompt thinking about issues that you may have noticed but not yet considered addressing as well as to help you to notice issues of which you may currently be unaware. The answers are not necessarily good or bad; they should reflect the current and desired state of your unique board and its supporting committees.

Don’t ask all of the questions. Trust yourself to recognise and ask the most important ones. You can return to the list at intervals to consider your progress. We recommend using the list to stimulate your thinking:

  • When preparing the board and executive succession plans
  • When talking about board composition with stakeholders
  • Before and after developing and reviewing strategy
  • When preparing for the AGM or other shareholder meetings

At the end of the check list, we have listed some references that you may wish to investigate for additional reading on the topic. We have also included some suggestions for putting into action the ideas that result from considering the checklist.

Assessing board effectiveness

 
1. Do the directors work as a team and complement each other’s skills?
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2. When the board makes a decision do all directors support that decision even if individual directors originally preferred a different outcome?
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3. Do board discussions and company data remain confidential?
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4. Can the board resource its committees with the required skills?
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5. Do the executive team look to the board to provide leadership (rather than view them as a burden)?
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6. Do the directors exhibit good governance? Do the directors all make sufficient time available to perform their roles and to attend meetings?
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7. Have past decisions of the board demonstrated that directors collectively exhibit good judgement?
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8. Do the directors treat each other and the staff with courtesy and respect?
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9. Do the directors embody the spirit – as well as the letter – of the company’s code of conduct? Do they live the values?
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10. Is it clear that no directors are currently banned, otherwise unsuitable, or suffering from an irredeemable conflict of interest?
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Providing strategic insights

 
11. When you look at the organisation’s strategy, is it clear what skills will be required to govern that strategy? Is there anybody on the board who does not possess at least one of the skills required to govern delivery of the strategy
 
1?
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12. What processes does the company need to excel at to perform better than its competitors? Is there at least one director on your board who has been responsible for similar processes as a senior executive?
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13. What strategic problems does the company need to solve? Is there at least one director on your board who has personal experience in solving similar problems?
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14. What new activities
 
2 will the company undertake in the future? Is there at least one director on your board who has personal experience in performing a similar activity?
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Meeting stakeholder expectations

 
15. Does the composition of your board meet the recommended balance of gender, age, qualification, or experience expected by your shareholders, relevant regulators and governance authorities?
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16. Have shareholders voiced any concerns about your board’s composition?
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17. Have funding bodies, such as banks or grant giving organisations, voiced any concerns about your board’s composition?
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18. Are there any requirements in your constitution for directors with specified backgrounds
 
3?
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19. Do all of your directors live in postcodes with similar socio-economic demographics? Does that demographic match those of your staff, suppliers, and customers?
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Building relationships

 
20. Do the host, or Indigenous, communities associated with your physical locations have any concerns that your board needs to understand? Is there at least one director on your board who has personal experience in addressing similar concerns?
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21. Does the board need to better understand the concerns of any major suppliers or customers? Is there at least one director on your board who has a strong relationship with that organisation and can pick up the phone to talk through issues that may arise?
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22. Have any major shareholders (especially those with power to sway a vote) requested board representation? Are there any trusted individuals with experience managing the conflict of interest (in acting as both a company director and individual shareholder representative) who may be able to fill this role?
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Supporting executive development

 
23. What skill does the executive team need to develop? Is there at least one director on your board who can help mentor or guide the executives with that skill?
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24. What is the desired culture for the organisation? Do all the directors embody some positive aspects of that culture?
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25. When the CEO wants to ‘bounce an idea’, which directors does he or she call? Which directors would he or she not call?
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26. Do your board committees support the transfer of knowledge from the board to the executives? What other opportunities exist for your executives to learn from your directors?
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Enabling succession

 
27. Does your board have tenure or term limits? Which directors are nearing the end of their expected terms and what skills will need to be replaced when those directors leave?
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28. Which directors share skillsets? Do you need these ‘overlaps’ to spark valuable conversations or cover for absences?
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29. Which directors possess skills that will no longer be required as the strategy is implemented, and the executive team gain experience?
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30. Is there any director on your board whose reputation prevents prospective good recruits from joining the board?
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31. Which directors are actively transferring knowledge to their successors on this board, as they look to transition themselves to a new board?
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32. What processes does your board use to help directors move from the board, to a desired new challenge, when their skills are no longer required?
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Taking action

Read the questions and note which ones you can confidently answer. Make a record of any actions that you wish to take to help answer any questions that you were not confident about. Remember that director development is an option that may prove more feasible than removal.

Discuss your chosen actions, and their rationale, with the board chair or nominations committee. Schedule any agreed actions as for immediate action before the next board meeting, for discussion with the board, or for action within the next year. Keep track of the schedule and, where possible, incorporate monitoring into your normal board calendar.

If you are the chair, you may wish to share your observations from reading these questions with your board colleagues or with your own board mentor, before discussing them privately with any directors whom you believe should move on from your board.

Additional reading and reference sources

Reviewing Your Board: A guide to board and director evaluation, G Kiel, G Nicholson, J Tunny and J Beck, Australian Institute of Company Directors, 2018

Difference Makers: A leader’s Guide to Championing Diversity on Boards, Nicky Howe and Alicia Curtis, Australian Institute of Company Directors, 2016

101 Boardroom Problems and How to Solve Them, E Mina, Amacom, 2009

Setting the Tone at the Top, B Seldon and M Muth, Australian Institute of Company Directors, 2018

Don’t; How Using the Right Words Will Change Your Life, B Seldon, Mercier, 2016