News & Updates

Golden Rules To Being A Good Company Director

Kirstin MacDonald

Published byKirstin MacDonald

14th February 2024

Golden Rules To Being A Good Company Director

Wright, Johnston & Mackenzie LLP senior associate Kirstin MacDonald recently delivered training to her co-directors at the Inverness Chamber of Commerce on the importance of their duties as directors, and she has shared some of her top tips on what it takes to be a good director below.

Kirstin, who is based at our Inverness office, has laid out her five golden rules for directors when considering how to best conduct themselves in their role.

With WJM since 2014, Kirstin was appointed as a non-executive director of the Inverness Chamber in May last yearand has been reflecting on her responsibilities in the position.

Kirstin specialises in corporate law, making her the perfect fit to advocate for the Chamber’s 400-plus business member organisations.

She provides advice to a wide range of businesses in the Highlands and Islands in a variety of areas including, business and share sales and acquisitions, equity investments, partnerships, succession planning, restructuring and re-organisation, commercial contracts, company secretarial and corporate governance, as well as advising the charitable and not-for-profit sector.

Inverness Chamber of Commerce is the largest independent business membership organisation based in the Highlands & Islands. With over 50 events held each year, its goal is to connect, support and represent its members at a regional, national and international level.

Here are Kirstin’s five golden rules for directorship:

1. Be present – both physically and mentally.
Attend board meetings, review papers in advance, engage with other board members in the process and stay updated on company activities.
This, of course, extends to being present mentally. And there is a difference between physically engaging in the work and being mentally engaged.
It is vitally important to take a step back, look after yourself, consider the importance of your directorship and be invested in your role.
If you’re not on top form, the whole company suffers.

2. Take the role seriously – you’ve been asked to be a director for a reason.
Use your professional and personal skills to analyse and provide thoughts during board meetings. Do what is necessary to help the board make informed decisions, using all of your expertise.
Whether your background is legal, business, marketing or another discipline, your skillset is valued and important to the direction of travel for the board.
While it is important to understand your own role as a board member, collaborating with others and bringing it all together to make the best decisions is the aim of the game.

3. Think outside the boardroom – your decisions will impact more than just the people in the boardroom.
Employees, shareholders, customers and the broader community will all feel the impact of your decisions at one point or another.
On top of this, you must consider environmental and social impacts in a perpetually-changing world, where being held accountable is easier than ever with advancements in technology.
Keeping your ear to the ground and gauging the mood of your workforce, colleagues, community, customers or the nation is vitally important to keeping the board and your organisation ahead of the curve.
It also allows you to make informed decisions, often about sensitive subjects such as budgets, people’s job security and wages.
Politically, too, it is important to keep abreast of the latest developments, as there may come a time when current affairs and topical issues impact your organisation or call on you to act.

4. Do the right thing – remember you are helping to steer the ship.
Personal agendas, views and opinions should be left to one side. The focus should be on what is in the best interests of the company and everything which falls beneath it.
Much like point three, doing the right thing involves considering the wider socio-economic and socio-political landscape before deciding which way is best to steer your organisation.
Difficult as it may be sometimes to park your own views, it’s a necessity for fit and proper directorship and must be actively practiced should you wish to manage a progressive and prosperous organisation.

5. Understand your legal duties – they are (probably) more important than you think!
Ensuring you are not only aware of your responsibilities, but are actively employing best practice is crucial to keeping a steady course and navigating a sometimes tricky legal landscape.

Continuing to stay on top of the latest laws, and rules and regulations, via training is an exercise that should not be taken lightly.

Having delivered training to the Inverness Chamber of Commerce directors on their legal duties, if you would like a similar session for your organisation’s directors please don’t hesitate to get in touch.

You don’t want to fall foul of your duties and keeping them in mind when making decisions should lead you down a safer path than sticking your head in the sand.

 

This article first appeared in Executive Magazine 

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