There are many good reasons to serve on a board of directors. Eager to take the next step in their careers, some executives are drawn to the opportunity for professional development. Others are motivated by a passion for a particular industry, or for companies poised to contribute to industry growth.
This is true of potential nonprofit board directors and corporate board directors alike. According to Nick Donatiello, a lecturer on the subject of corporate governance at Stanford Graduate School of Business, “individuals join nonprofit boards because they want to make a difference and contribute to the mission of the organisation.”
Bonnie Gwin, a vice chairman with global executive search firm Heidrick & Struggles, notes the “substantial professional benefits” of serving on a corporate board. These include “the opportunity to work with a group of highly accomplished fellow directors, to learn how another company or industry works, and to enlarge your network of influential colleagues,” she writes.
Regardless of what fuels an executive’s interest, successfully joining a board requires a thoughtful strategy. Even if one’s skills and experience make one ideally suited to serving as a board director, limited openings and tough competition can create numerous barriers to entry.
Know What to Expect
When it comes to determining how to join a board of directors, it’s important to know that the first step in the process occurs long before a director targets a specific board seat. Prior to actively pursuing a position, every potential candidate should ensure that they know exactly what they’re getting into.
As part of a themed series called “The Board Game,” The Boston Globe reports that board members generally work “fewer than five hours per week per board,” and that director pay at publicly traded companies of all kinds has been on the rise since 2000.
At the same time, the role isn’t as cushy as it used to be. “Fifteen years ago, most people who were on boards were members of the country club, they were friends of the CEO, and they didn’t do a heck of a lot of work for the money,” Martin Coyne II, former executive vice president at Eastman Kodak Co., tells The Boston Globe. “Now it’s a much harder job. You have to do your homework, work at it, stay current on things, and you have a tremendous amount of personal exposure if things go wrong.”
This can be problematic, especially if someone serving on a board has a C-suite position at a different organisation. A survey conducted by business advisory firm Deloitte and Forbes Insights found that businesses worldwide are very concerned about reputational risk and their ability to manage it. As Peter Keel, co-founder and CEO of Australian law and advisory firm Ash St. , noted in an article last year, “…as the persons tasked with enterprise governance, ultimate responsibility for reputation rests with the board of directors.” If a company’s reputation is at risk, the personal reputation of board directors may be compromised as well.
Those serving as executives at separate organisations must also weigh how joining an outside board could impact their ability to function at their full potential. In 2013, tech and media investor Eric Jackson argued in Forbes that operating executives should never serve on an external board.
“It’s a distraction,” he said. “The job you’ve been hired for is enough to keep you busy — or should be.” At the same time, the benefits may offset the gamble. When an executive takes the time to share their unique brand of knowledge and pay it forward to another organisation, the business world as a whole reaps the rewards.
Another aspect of this kind of work that’s worthy of consideration is travel. While many boards now employ board portal software that reduces the need for meeting-related travel, board members may occasionally need to travel domestically or abroad. This too could interfere with daily executive duties, making demands on existing work routines. Executives should evaluate this potential quandary in the context of their current job, assessing their flexibility and availability accordingly.
Refine Your Resume
While serving on a board has its trials, there are benefits as well — which is where the competition comes in. At any given time, countless executives are seeking an appointment to a board, but vacancies are typically few and far between. That means executives must find a surefire way to stand out.
As global executive search firm Spencer Stuart explains in Getting On Board: How Executives Can Position Themselves for a Seat at the Table, boards won’t usually announce their search for new directors. Rather, they’ll opt to have the nominating committee and the CEO handle candidate recruitment and board member selection together.
“Boards want active or recently retired CEOs to serve as directors, ideally younger executives who will bring current business experience,” writes Julie Hembrock Daum, Managing Partner of board services with Spencer Stuart. “They are also looking for individuals with specific expertise — executives with global experience or technology backgrounds, financial experts, those with proven digital chops, or people who have served at the top level in Washington.”
Possessing this kind of experience isn’t enough, though; executives must know how to sell it, too. Gwin recommends preparing an elevator pitch that “succinctly touches on your interest in board service and the unique contributions you might bring to it.” Once written and refined, this can be modified for each company and unique audience. “Test your story with a board member you know well and fine-tune it accordingly,” Gwin writes. “And be prepared to adapt it to the occasions where you will use it and to the people who will hear it.”
The objective of this elevator pitch is to drum up interest that leads to a candidacy, but ultimately, a written resume will be required as well. Executive resume writer Michelle Dumas suggests in a LinkedIn post that executives ask themselves which factors are likely to be most important to those making board seat selection decisions. The answer will determine what to highlight, she writes, and might include qualifications like visionary leadership, strategic planning skills, industry expertise and fundraising abilities.
“When you write your board of directors resume, you should selectively include and emphasise accomplishments and past experience that show how you have demonstrated these traits and skills in action,” Dumas says.
While it may seem as though executives have no choice but to sit back and hope they’ll be selected as a candidate, there’s plenty they can do to call attention to their skills. Daum’s tips include aligning oneself with the individuals who have successfully obtained a board seat.
“Express your interest in serving on a board to colleagues who already serve,” she says. “Reach out to other people who may be influential in director selection, including executive search firms that focus on director recruitment, lawyers, investment bankers involved in deals, accountants and, especially, private equity firms.”
The key to catching the eye of those tasked with board member selection is to connect with influential people, other experts agree. At a Northeastern University event for women about recruiting for maximum board effectiveness, Michelle Stacy, who serves on multiple boards, including that of iRobot, said that 80 percent of board seats are filled as a direct result of networking.
“Every connection you make is a potential place where you might get a board appointment,” Stacy says. “Consider: What is the expertise strategically, businesswise, that you’re bringing and find the networking bridge that goes in that direction.”
Bonnie Gwin encourages executives to treat the process like a job search. “Once you’ve zeroed in on what really excites you, use your network to research companies that fit the bill,” she writes on the company’s website. “Consider how you might customise the case for your readiness in various instances and begin to develop a list of people you know who might have connections to the sector or to companies that intrigue you.”
Don’t Go “Overboard”
The process of obtaining a seat at the table doesn’t always end when an executive is successful. Whether because of the pay, an interest in the company, or a combination of both, many directors are tempted to join multiple boards.
While this is a common practice, executives should take care not to spread themselves too thin. If they don’t have time to attend the requisite meetings, it’s likely their ability to help grow the company will be limited, too.
According to shareholder advisory firm Institutional Shareholder Services, in The Boston Globe, more than 230 corporate directors nationwide serve on a minimum of five publicly traded boards. “Many directors have joined so many boards that some watchdogs worry they can’t handle all their duties — a problem sometimes called ‘overboarding,'” according to the newspaper.
What’s more, some companies set limitations for the number of boards that its directors can commit to. If a director already serves on several boards, he or she should check those companies’ guidelines to ensure that they’re complying with board policy.
The question of how to be on the board of directors is a complicated one. Those who are serious about pursuing this endeavor must ready themselves for the challenges that lie ahead.
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