LISTING candidates need able, independent, non-executive directors on the board for their flotations to succeed, according to the Institute of Directors. It also urges quoted companies to appoint as independent non-executive directors people who can enhance management, rather than make convenient appointments to satisfy the stock exchange's requirements. ''I know of companies being told [by the exchange] not to float because they do not have a good management team,'' said Paul Berriman, committee member of the institute's Hong Kong branch. This was despite the companies' sound financial histories, he said. ''Nobody will invest in a company if it does not have a strong management team.'' The stock exchange requires that listed companies should appoint at least two independent non-executive directors to their board. Mr Berriman said he believed many quoted companies had asked friends to join the board as independent non-executive directors, but that such people did not necessarily add value to the management team's strength. He said, it was important for companies to offer such appointments to people who could supplement the board's expertise. A manufacturing company, for instance, could appoint as non-executive directors people with professional knowledge of accounting. But companies should be careful not to appoint people working in an organisation with conflicting interests, he said. The institute's Hong Kong branch runs a board appointments service to help companies with the appointment of non-executive directors. The service, launched in May, is believed to be the only non-profit-making operation of its kind in the territory. Service is confidential, with a charge of $5,000 to cover costs. About 60 institute members in Hong Kong have registered as candidates, according to Mr Berriman, who heads the service. Some underwriters looking to help their clients float successfully had also shown interest in the service, he said. The service entails a detailed assessment of the company's needs, which forms the basis of a specification for the appointment. Once a specification has been agreed upon, the service initiates a search for likely candidates which includes consulting its database for existing suitable candidates. Mr Berriman expects the service to be most in demand from smaller companies, because many blue chips already have strong management teams. The institute has been running a similar service in Britain for four years. Mr Berriman also said the territory did not understand the role of the director. ''I think a lot of people don't fully realise the role of directors, especially the non-executive ones,'' he said. Many people, for instance, did not know that directors' liabilities were unlimited even though their employers were limited companies. They also might not know that non-executive directors should attend all board meetings. Mr Berriman said in Hong Kong some directors held too many directorships to be able to discharge all their responsibilities. ''Two and three non-executive directorships are more than most people can handle,'' he said. To enhance understanding of the director's role, the institute expects to soon publish an 80-page guideline for directors. The book's contents include the director's liabilities, functions and legal status.