What Makes A Good Company Director Today?

Company directors hold a great deal of responsibility in a modern organisation. They make decisions on the strategic future of the company, using independent judgement to continually challenge the status quo. 

In addition, Financier Worldwide reports that “since the financial crisis, the risk oversight responsibilities and associated liabilities of European directors have been increasing”

So, what makes a good company director in today’s corporate world? 

The company looks to its board of directors to bring skills, expertise and experience to the table that it is otherwise lacking. This article explores ten key facets that every board director should display in order to be able to help guide the company in the future.

What makes a good company director?

Good company directors will possess some or all of these ten traits:

1. Balanced judgement

Directors continually oversee the actions of management in steering the business, and this requires balanced judgement, not a partisan appraisal. Rather than making snap decisions based on personality clashes, a good director will assess the suitability of the incumbents, based both on their record and their suitability to keep up with a changing landscape. 

Adjustments within the company, as well as those relating to external factors, can transform effective managers into ineffective managers and vice versa. The role of the good director is to identify and weigh up future challenges and use balanced judgement to understand how likely management is to be able to handle them in a manner that advances the business. 

For example, a CEO may have presided over steady growth for a number of years before seeing a dip in the following year. In this case, it is up to directors to use their balanced judgement to determine whether they have faith that the CEO can arrest the decline or not. They might base this on historical performance, the reasoning that the CEO gives for the performance or solid evidence (or lack of) that they provide to show they can return to growth. 

Some CEOs will possess the qualities to achieve their goals, and others won’t. Good company directors will be able to assess accurately what is the case in their organisation. 

2. Critical thinking

Companies will often issue directors with summaries of the important information at play before a meeting, but a good board director will want to delve deeper, too. They have a thirst for exploring the raw data in order to extrapolate their own findings and develop an all-around understanding of the matters at hand. 

When someone presents them with a narrative about the performance of the company, the challenges on the horizon or any other aspect of the corporate world, they will not allow that to sway their view and will explore the evidence to create their own assessment. 

They will disregard their initial reactions and challenge themselves to see the issues from different angles, presenting their case at the board meeting and welcoming debate and discussion before settling on their stance. 

This critical thinking approach prevents boards from making snap decisions based on emotion. It stress tests the various theories and helps guide the decision-making process towards the most useful and effective outcomes. 

3. Adaptability

No one likes to admit that their strategy did not work, but occasionally you have to. The business landscape is continuously shifting and changing, meaning that unforeseen risks or challenges appear and require attention from the board of directors of a company. 

At this point, there are two choices to make. You can adjust your strategy accordingly or continue to execute your plans. Unfortunately for Kodak, its management team decided against change. Having invented the digital camera internally in 1975, the company was focused on ploughing forward with its film-based business. This continued even as it became obvious that digital photography would disrupt the industry more than previously envisaged. The firm filed for bankruptcy protection in 2012. 

A good company director will sense change, listen to the market and be adaptable enough to roll with the punches and thrive in the new business environment. An inability to consider change is a disadvantage, as witnessed when companies had to make swift decisions to mitigate the COVID-19 pandemic. Adaptability offers the chance to avoid pitfalls and flourish.  

4. Creativity and innovation

Creativity and innovation are what helps your business stand out from the competition. They allow you to take on challenges from a different perspective and find new solutions that your peers have not considered. 

This is a shift that has been in motion for the last five years, at least. Mark Ganz, the CEO of Cambia Health Solutions, told the Harvard Business Review in 2017 that the company’s board meetings had evolved to value engagement rather than simple acceptance or rejections. “We now bring the board ideas that are not fully baked and say, ‘Help us with this.’” said Ganz. “Once they got used to it, it dramatically improved the board–management partnership and the value board members bring to the work of the company.”

It makes sense to let the creativity of directors run free when discussing topics. Rather than simply offering a choice between two options, letting board members play with ideas and approach solutions from a variety of angles can create innovative solutions that work.

5. Good collaboration skills

A single company director cannot drive innovation alone. This is why collaboration is crucial in the board room. The way that board members bounce ideas off each other is what leads to the most effective outcomes.

Directors must be capable of working together, trusting each other and willing to listen to other people’s opinions in a balanced manner. This is not to say that they have to agree, but rather through debate, the board should move towards a consensus that reflects the melting pot of ideas. 

Good directors understand that they can learn from each other, just as they can teach their colleagues, and are open to new knowledge. 

Although boards choose directors based on their skills and experience, they do so to fill gaps and to add to the strength of the whole. Individual board members may be brilliant in their own field, but they should also combine to create a formidable team that works together to achieve results for the company. 

To aid collaboration, the iBabs board portal stores all important documents in the cloud, allowing for more streamlined communication between directors ahead of, during and after board meetings. 

6. Desire to learn and improve

Complacency has no place in the boardroom, as boards must evolve to meet new challenges. Standing still can lead to the same pitfalls as those stubborn boards who refuse to adapt to changes in the corporate landscape. 

Directors who practise continuous improvement learn from their experiences and finetune their approach to their responsibilities in order to upscale their performance. Board members must possess the drive to want to improve their processes in order to achieve the best possible results for the board. 

7. Keen observation

Observation skills are essential for company directors. By monitoring and observing both the company’s performance and the market as a whole, the director can check whether they are aligned and draw the board’s attention to the subject if they are not. 

The director should also monitor their own performance and observe how they react to events. When reviewing actions and crisis mitigation efforts, the director can assess how effective they were and understand what they could have done differently. 

Another situation in which observation is important is when evaluating the board and the CEO’s performance. The board should conduct annual evaluations to ensure it is making progress towards its goals and is operating effectively. One element of that evaluation is to review the performance of peers and the CEO, meaning that board members must be observant in order to make the evaluation as productive and meaningful as possible. 

8. Competitive drive 

Competitive drive is what keeps leaders focused on their goals to advance the company. Without it, a director can become complacent, and that is detrimental to the business as a whole. 

A strong competitive drive pushes a board forwards and ensures the company outsmarts its rivals who have that hunger to grow and win. 

Those with the drive to take on competitors will also be more inclined to be innovative in their thinking and to develop new ideas to give the organisation a competitive edge. 

9. Communication skills

You can be the best critical thinker in the room, but if you cannot express your concerns or solutions in a succinct and clear manner, it is difficult to gain buy-in from the rest of the board. 

This not only includes passing on information but also understanding how to converse with different people in a manner that makes them feel included and valued. There are many different personality types on a board, and they all need to be dealt with in a different manner. Good communicators can tailor their approach to each colleague in order to best help them understand what they are saying. 

A board that communicates well is more efficient in meetings, as there is less need to catch everyone up on issues, there are fewer opportunities to talk at cross purposes, and people make their points more directly. 

The better the communication of directors, the more productive your meetings will be. 

10. Kindness and strong ethics

Ethics are important for directors. In many jurisdictions, they are even duty-bound to act with honesty, fairness and integrity. But this shouldn’t just be a compliance issue. In a position where your decisions affect the livelihoods of hundreds, or sometimes thousands, of individuals, you should always conduct yourself in an ethical manner

Kindness is also essential in a director’s dealings with their peers. There is no reason for boards to be toxic environments. The most effective boards are those in which there is mutual respect, with constructive debate and discussion.

Specialist vs generalist knowledge in the boardroom  

Organisations often select board members for a certain set of skills or attributes. However, when in the boardroom, is it best to be a specialist or a generalist? Should you stick to your area of expertise or branch out? 

Here is a comparison between specialists and generalists in the boardroom. 

Specialist knowledgeGeneralist knowledge
An expert or thought leader in a specific fieldA broad range of skills and experiences across different fields
Invest time and effort to become a go-to expert in the sectorContinually seek new experiences in fields in which they are not yet familiar
A specialist director would know everything about one area of governance, whether that is finance, compliance or anything elseA generalist director would bring experience in a range of governance topics to the table

In reality, a mixture of specialists and generalists is optimal. When times become tough, having someone who understands the sector and specific knowledge area in minute detail can be extremely valuable. However, it is also beneficial to be able to look at the bigger picture, and generalists help in this regard. 


What personality types do best at management?

Empathetic leaders are best placed to gain the confidence of the widest range of colleagues and to get the most out of them. Managers also need to be driven and fair in their dealings. 

What are a director’s general duties?

Directors must exercise their independent judgement and always work in the best interests of the company. They should be careful and diligent whilst avoiding conflicts of interest in the line of their duty. 


When you are looking at what makes a good company director, the answer involves a number of complementary facets – from balanced judgement and critical thinking to kindness and competitive drive. 

Communication and collaboration are also essential. One of the ways to improve them is through a board portal solution, such as iBabs. The platform allows for instant communication between members on their devices and helps to improve preparation for a board meeting so that you can concentrate on the important matters at hand in the boardroom. Request a free demo for your company today.

References and Further Reading

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