What Directors Need to Consider Before Joining a Board

What Directors Need to Consider Before Joining a Board

Finding the right independent board members for a private company can be a daunting task.

Not only is there competition for top talent, but also companies must find the right mix of experience and skill sets that will augment those of directors already on the board.

The other side of the coin is what directors need from boards.

Lori Tauber Marcus, the founder of Courtyard Connections, an advisory firm focused on marketing and leadership in consumer-facing sectors, and director for Phunware, Inc., Price Chopper Supermarkets-Market 32, DNA Diagnostics Center; and Marsha Everton, a corporate director and adviser at Integrus Holdings, Inc. and The Fitzpatrick Companies, Inc. They have come up with what they call “The 4F Lens” to help independent directors zero in on exactly what they’re looking for if asked to join a board.


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“When you look at companies and are looking to join a board, you have to make sure people are really open to you being the person that wants to take them were they want to go,” Marcus says. You should not only aim to keep the company where it is.

Marcus and Everton both have private, public and nonprofit board experience serving on fiduciary and advisory boards. They use “The 4F Lens” to explain the four areas where “red and yellow” warning lights can come on when deciding on a company to join. They emphasize that there’s no one-size-fits-all method to match up a board and director; each person and company has to decide which factors are most important to them.

The 4Fs stand for “Fit, Family, Focus and Financial.”


  • Personal fit with company culture.
  • Alignment with personal values.
  • Personal fit with boardroom culture; emphasis on board input, not just presentations to board; and group dynamics that allow for “agreeable disagreement.”
  • Skills and expertise that can add value to the company; specifically, experience in the industry, the channels of distribution and the company life stage.

“This is the most important of the 4Fs to me, because it deals with your personal values,” Everton says. “You have to be sure you are in agreement with what the company does.”


  • Clear separation of roles, family, shareholders and employees.
  • Family-only matters addressed in other forums.
  • Consistency of compensation and benefits for family member employees and other employees; this is crucial to seeing that all employees are treated equally, including those who are not related to the founders.
  •  Robust succession planning, with board input, especially for family member employees.
  • For ESOP companies: Use of ESOP trustee professional services.

 “One of the boards I’m on is a mostly outside management board, and when you have outside management combined with people in the family, it’s very important to understand, is there one set of standards, or is there a set of standards for the family and a set of standards of for non-family?” Marcus says. “As a general rule, it’s much better to discuss this before it becomes an issue.”


  • Clarity of company mission and values: Does senior leadership “walk the talk?” Is the company able to maintain employee alignment with mission and values?
  • Clear, purpose-driven statement of “what business we’re in.”
  • Clear identification of customer and customer segments.
  • Focus and clarity on what drives business profitability, short term and long term.

“This professionalism assures me that I’ll be able to be effective as a director,” Everton says. “Make sure you understand what your role is, and what the company sees your role will be going forward.”

“I also look for transparency,” Marcus says. “I want to see a CEO who is not holding things so close and wants to micromanage every communication you have. There needs to be some trust in letting you talk to members of the company without being so involved.”


  • Profitable P&L, strong balance sheet, strong cash flow.
  • Consistent, ongoing investment in the business.
  • Financial reports that reflect company strategy.
  • Risk identification and scenario planning.
  • Audited financial statements, with consistently clean opinions.
  • Separation of family and business expenses.
  • Strong D&O insurance.

“One of the worst possible scenarios, as an independent board member,” Everton says, “is when you’ve got deep-rooted financial issues that lead to bankruptcy, litigation or liquidation, because then you end up spending a whole lot of time on those challenges, rather than helping build a business.”

According to Everton and Marcus, all four lenses are connected, but it’s also important to consider them independently.

“Looking at them all, the lenses work together in lots of ways, and you start to develop your own personal set of lenses,” Everton says. “Not every board position is going to fit with every criterion here, but it’s a way to step back, review and discuss what you’re willing to accept as your own personal risk, and the challenges you’re willing to take on, by joining a board.”