Do you have what it takes to be on Yahoo!'s board?

The search continues at Yahoo! for new directors. Who will they be?

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The battered media company is preparing to add some fresh blood to its board as the company’s new CEO Scott Thompson, who was lured away from PayPal, seeks to turn around the firm’s poor financial performance and strengthen its weak governance practices.

The Wall Street Journal says nine Yahoo! directors are up for reelection later this year at the company’s annual meeting. Director Patti Hart, who is responsible for the board’s nominating and corporate governance committee, is leading the search.

It won’t be an easy job.  She’ll have to identify candidates who are capable of making decisions that will help the company rebound after suffering a mountain of financial losses to Facebook and Google in a number of categories such as product innovation and online advertising. Yahoo!’s current board is discredited, among other things, for approving the hire of ousted CEO Carol Bartz, whose abysmal performance angered investors and prompted calls for a series of reforms at the struggling company.

According to the New York Times, Daniel Loeb, the hedge fund manager of Third Point and one of Yahoo!’s largest shareholders, will be in Silicon Valley this week to interview board candidates in preparation for a possible proxy fight. The investor has publicly voiced his opinion about Yahoo!’s board and has until March 25 to file a competing slate of directors.

One thing is certain: whoever fills a seat on Yahoo!’s board will need a high level of expertise if he/she is to help overcome its myriad challenges, which are exacerbated by the company’s shaky past and an uncertain economy.

But Yahoo! is just one example of a board undergoing massive overhaul. The quality of directors is currently a major concern for shareholders, and successful candidates will have to have more than a sterling résumé with ironclad references. According to industry observers, shareholders are more alert to the issues and are carefully scrutinizing those who serve on audit committees, compensation committees, and so on. Meanwhile, the level of insider knowledge, experience and education of a board director is becoming increasingly relevant.

If Yahoo! wants to restructure its operations to gain a competitive edge, its board will have to be equipped with a specific skill set. The directors will need to be imaginative, aware of potential risks and able to invent new strategies to help address unexpected problems. Most importantly, if they are to rebuild trust they’ll have to increase communications with stakeholders.

Beyond sector-related skills, [Yahoo!] needs board members with absolute independence in word and deed, who are fully engaged and active,’ says, Lucy Marcus pictured left, CEO of Marcus Venture Consulting, whose name has been suggested by some as a potential candidate for Yahoo!’s board. ‘The new directors need to bring a true outside and fresh perspective, with international experience.’

The bottom line is this: finding the right candidate for a company’s board is now tougher than ever. With concerns around executive compensation, board oversight and risk management becoming top priorities on the boardroom agenda, a well-qualified set of directors is essential for corporate success.

But let’s hear from you: what in your opinion makes a good director?