The independent board seat represents a multifaceted role with a number of responsibilities. Greater levels of responsibility often mean higher compensation and more involved time commitments. Levels of responsibility vary based on the role or roles a member occupies on the board but are also dependent on how the organization functions as a whole. Board directors are expected to define strategy and oversee performance, duties that necessitate a number of committees dedicated to distinct areas, including auditing, compensation and reviewing executive performance.

 

Research shows that board directors at public companies spend an average in excess of 300 hours per year on board obligations, while those at private companies spend an average of 150 hours. Board directors can expect to spend the equivalent of one full month of workdays fulfilling their duties to the board, give or take. Many directors have other full-time roles in addition to their board appointments. It is essential that any further responsibilities are not taken lightly, but are carefully considered alongside an individual’s present workload and personal obligations.

 

A director who overextends themselves and attempts to maintain too many commitments may heavily influence the performance of the board. The board has a responsibility to uphold the best interests of the company’s shareholders and are expected to maintain effectiveness, efficiency and accountability in all decision-making. Directors must prepare for meetings, presentations and strategy sessions beforehand, to ensure active and insightful participation and engagement. An estimated three hours of preparation are spend for every hour of actual meeting time, including reviewing financial documents, annual reports and relevant publications, conducting industry and competitor research and consulting with colleagues.

 

The board is a crucial part of a company’s function and reputation. Companies must evaluate and clearly define the time commitment that is expected of their directors and align those expectations in their recruitment processes.