3. What could really hurt—or kill—the company in the next few years?

Think of it as The Worst-Case Scenario Survival Handbook for directors—a way of getting people to think through crises before they occur. Part of your job is to do the same—by posing a series of "What ifs?" What if the company loses its biggest customer? What if the FDA rejects your new drug? What if the business loses its precious AAA credit rating?

The exercise has all the fun of estate planning. But unexpected events have a nasty way of triggering other unexpected events, as Pacific Gas and Electric discovered in 2001. Domino No. 1 was California's electricity crisis. Domino No. 2 was the downgrade of the company's debt by rating agencies. Domino No. 3 was the utility's inability to get further financing to purchase power. Click, click, click ... right into Chapter 11.

What companies in crisis too often lack is a circuit-breaker. A good board of directors will be just that.

4. How are we doing relative to our competitors?

No one wants his company's costs, sales, or profit margins to be in line with industry averages, of course. We want our costs to be lower, our sales to be brisker, our margins to be fatter. But when there is a big difference (good or bad) between your company's numbers and those of its peers, it can sometimes signal that something inside is wrong. And sometimes is the operative word. (Quick quiz: Why were WorldCom's operating expenses so much lower than its competitors? Oh, this one's too easy.)

When asking this question, however, don't limit the parameters to the company's financials. Equally important are issues of strategy. Are rival firms, for instance, getting in or out of one of your key businesses? Is Wal-Mart or Dell or eBay doing what you do faster, better, or cheaper? Managers should at least be able to provide a straightforward analysis of the competition—even if they haven't quite worked out their defense.

5. If the CEO were hit by a bus tomorrow, who could run this company?

The U.S. Army requires every officer to have multiple subordinates ready to take over his or her job. (In fact, the contingency planning goes even deeper: "When you are given a mission, you need to brief down all the way to the soldier at the lowest level," says an Army spokesman.) General Electric has an emergency leader-in-waiting should something befall CEO Jeff Immelt. The principle is simple: An organization's fate is more important than the fate of its current leadership. If the top managers don't have capable replacements at hand, the organization could be left with a gaping hole.

That said, succession planning goes well beyond preparing for emergencies. Your role as board member is as much about finding tomorrow's company stewards as it is about engaging today's. And the bigger the bullpen of talented relievers, the better the team's chances. Agreeing upon a few names is only a start. The board of directors should then make sure the process of grooming takes place. No CEO should be upset at the thought. After all, you're just making sure his legacy is protected.

6. How are we going to grow?

All public companies have to grow. It's a pressure so inescapable that it can easily overwhelm the best managers, tempting them to make big promises and cut corners when they can't meet them. Your job is to make sure that the CEO's growth plan is grounded in reality, not wishful thinking.

Since there are really only two ways to get growth—making it yourself ("organically") or buying it through acquisitions—this means you have to ferret out management's assumptions and apply a common-sense test. If the CEO is promising double-digit organic growth in a mature industry and a flat economy, respond with questions that force specificity: What new products or businesses, for example, are going to deliver that growth? And if the answer begins, "Well, Wall Street expects...," then look out below.

Alternatively, if management has grand visions of growing the company through strategic acquisitions, ask what may seem like an obvious follow-up: Are there any businesses in the CEO's M&A cross hairs that are actually affordable now? If so, does he or she intend to pay in cash or stock? If not, what's the plan? Overpaying, by the way, is not a plan—though several studies suggest that managers routinely do so. Nor is board surrender an appropriate strategy on the growth front. That's the tack Tyco's board seems to have taken in 2000, according to recent court testimony, when it granted CEO Dennis Kozlowski authority to do deals of up to $200 million each without its approval. The board wasn't merely rubber-stamping Deal-a-Day Dennis, it seems; it handed over the rubber stamp.