What to consider before joining a board or committee

Joining a committee or a board can be a way to expand professional experience, network with key contacts and add some serious influence on a resume. 

“It is a fantastic career opportunity for an accountant that adds to a long-term sense of purpose and credibility,” says Gerry Schembri FCPA, who recently served as chair of CPA Australia’s Disciplinary Tribunal, and who is a committee member for a not-for-profit legal centre in Melbourne.

However, newly minted board or committee members may find they are up against challenges they hadn’t anticipated but should prepare for. 

Gloria Sleaby FCPA, a member of the Australian Institute of Company Directors, says, “These can range from misunderstanding where an organisation is at in its life cycle – and whether you have the experience to get involved – to managing different personalities.

“An organisation may be well established, or they may be a start-up and need board members to take a more active role as they are trying to grow.”

Claire Braund, executive director of Women on Boards, also cautions that no two boards are alike, and a stressed not-for-profit may have an under-resourced board and a history of not paying board members while expecting a heavy commitment.

“While some positions may be labelled as voluntary, there is nothing voluntary about being a board member,” she says. 

Due diligence is key before you join a board

When joining a board, you are accepting a fiduciary duty, or a duty to act in good faith for the benefit of the organisation you are overseeing.

Due diligence is essential before you accept a board or committee role, according to Sleaby. 

“Don’t assume you know where an organisation is at. Read the financial statements and look for red flags. You don’t want to be on the board of an organisation that is insolvent.”

Ask to see a year’s worth of minutes and review them for valuable information about how the board operates, says Braund. Review a copy of the constitution that includes the rules of how the board or committee is run. 

Schembri says: “It is also critical for new board or committee members to understand the legal and regulatory environments in which a business operates.” 

According to the Institute of Community Directors Australia, board members and officers of incorporated associations have a risk of incurring liability if a personal breach of duty by them causes personal injury or damage to property.

Where such cases, although rare, can be proven the personal assets of board members can be seized, it says. 

CPA Australia members may also be brought before the disciplinary tribunal and receive a penalty that could range from a severe reprimand to forfeiture of membership, depending on the seriousness of the complaint, says Schembri.

Directors’ and officers’ insurance is something CPA Australia members who hold board or committee positions should look at closely to safeguard their interests, he adds.

Relationships and culture matter

Being a board or committee member isn’t only about a skill matrix; you need to be aligned with the culture, says Sleaby. 

“You should always look for a position in a field you are passionate about and where you have experience that can add value.”

Sleaby’s own current appointments as a board member, member of the Governance and Committee and chair of the Community Committee for not-for-profit DPV Health, grew out of an interest in community health that was ignited by her father’s experience with cancer treatment. 

She has also held several positions on CPA Australia’s Victorian Divisional Council and chaired the SME Committee and TAN Committees. 

Braund, who is chair of the Central Coast Conservatorium of Music and non-executive director and governance committee chair of Coast Shelter Emergency Accommodation Limited, has a lifelong interest in affordable housing and in music as an enabler of human creativity.

The role of the chair is also critical, she says. “They need to be in touch with board members on a regular basis and set up a framework in which everyone can have constructive dialogue in a safe and respectful space.

“Before you accept a board position, you should have met the chair, the other directors, the CEO and the chairs of committees. Go on LinkedIn and look at who they are connected to. Put their name in Google. 

“Being on a board is not just about the paperwork, it’s about the people.”

Boards are a significant time commitment

Don’t underestimate how much time it will take to read minutes, papers and reports and make notes as well as plan questions. 

“The onus is on you to come up to speed on anything you are uncertain about before the meeting and call the chair if you don’t agree with something and want it taken back to management,” says Sleaby. 

“New members should also be aware that, once on a board, they will always be asked to be on at least one other sub-committee and that means more time and commitment.” 

Advises Braund: “Any substantive company with a turnover of $5 million plus should have a company secretary. 

“If not, checking details such as [whether] the appropriate reports been lodged with reporting bodies, or whether the minutes been documented and signed in absolutely the right way, will occupy your time in a way that is not the best use of your intellect and capacity.”

While a board or committee appointment may indeed turn out to be professionally worthwhile, Schembri says that if, before joining, you feel at all uncomfortable, you should walk away.