The jailing this week of Ray Williams a former chairman and Rodney Adler a former non-executive director of the failed HIH Insurance Limited are timely reminders of the risks faced by public company directors.
If you're thinking of accepting a directorship then a new guide published by CPA Australia Finding the right board for you: 10 questions to ask before joining a board (pdf) is worth reading.
The guide — targeted at those considering directorships with listed companies, not-for-profits and government enterprises — encourages potential directors to fully research the organisation they are considering joining before committing.
Regulatory reforms across all sectors, as well as increased stakeholder activism, have significantly increased the responsibilities of directors.
The guide is a structured approach to finding out about the company, its existing board, its business and processes. Even the way in which the company responds to the questions will be an indicator of the company's internal processes and culture.
But it's not all about the company. 3 of the 10 questions are about you.
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