There are several underlying factors common among individuals appointed to serve on several boards, such as the ability to get along well with others, financial expertise, personal experience and access to a variety of resources.
“The board may also need more diversity to better assess and execute action regarding internal policy, external perception or a specific governance concern”
A qualified board member is able to build amicable relationships with the CEO and fellow board members, voice a knowledgeable opinion to the rest of the group in a diplomatic manner and help create consensus within the board. One also needs to have basic financial knowledge, including how to read a balance sheet, a profit & loss statement, cash flow analysis and audit reviews. Plus, having access to resources like government leaders, professional relationships, past or present industry colleagues, attorneys, accountants and consultants is beneficial because these relationships can act as personal resources.
Depending on the current state or need of a company, different backgrounds are desired of potential board members. For example, if a company is about to go public, a director with past experience with an IPO would be able to offer valuable insight. If a company is in the state of distress, a director with a strong track record with turnaround situations may be an asset to the board. In the case of a company expanding offshore, a director with international experience is desirable. In addition, the demand for directors with experience in digital sectors like cybersecurity and social media management is increasing with the rise of greater technology and the Internet.
In some rare cases, they may be drawn to an individual because of their unique background and/or social qualifications despite no current vacancy of the board. More often than not, the board selection process is performed using a more or less formal version of a grid, which expands upon the traits listed above.