September 25, 2019 – Board service can be one of the most rewarding career experiences: It’s the opportunity to see first-hand how another company operates at the highest levels and to work with – and learn from – accomplished, articulate, and intelligent people. It’s why many leaders decide to start down the path to the boardroom. It’s also why the number of qualified boardroom candidates outweighs the number of board seats available in a given year.
Although more opportunities are open than in previous years, one of the major factors in the limited number of boardroom seats is the slow rate of board turnover. As a result, the path to the boardroom can be long and requires patience and persistence. Estimates put the average length of time for finding your first corporate board seat at more than two years.
As such, would-be board members must realistically set goals and expectations, says executive recruitment firm Egon Zehnder in a report entitled “The Path to the Boardroom,” by Lisa G. Blais, Sarah Van Dyck and Martha Josephson. “Board service comes with many challenges, but it also offers the opportunity to make a difference in the way companies run, which impacts all of us,” said the authors.
The first step, said Egon Zehnder, is to objectively assess your readiness and qualifications. “While board service is appealing, it is a demanding job with a significant time commitment,” said Egon Zehnder. “It’s often described as a part-time job with full-time responsibilities.”
Ask yourself if you are genuinely prepared for the significant number of hours spent preparing for and participating in full board and committee meetings, and the public scrutiny and increasing liability and reputational risk directors face, said the report. “Once you join a board, you cannot readily disassociate from a crisis or scandal the company could undergo,” said Egon Zehnder. “You will also want to ensure you are prepared to make the mental and emotional commitment required to mentor and monitor management, to act as an ambassador for the company, and to work unstintingly should a crisis arise.”
Bring the same objectivity you used to assess your readiness to thinking about your qualifications. Boards usually seek very senior executives who have been responsible for a significant P&L, who know how to interpret a balance sheet, and who understand how a business works and the range of functions that make it work.
Lisa Blais leads Egon Zehnder’s U.S. board practice. She also recently served as managing partner of the firm’s Boston office, led its North American industrial practice and co-founded the firm’s U.S. diversity council. She advises boards and CEOs on their most critical leadership challenges, including board & CEO succession, recruitment, assessment and development. She also co-founded the firm’s corporate governance exchange.
In the past, the sought-after roles have typically been CEOs, CFOs, and presidents of large divisions, but that profile is expanding, said the report. Today’s environment needs different skill-sets on the board for companies to thrive, so do not count yourself out of board service if you haven’t been a CEO, especially if you have expertise in an area such as digital, scientific knowledge for science-intensive companies, or experience with regulators for companies in heavily regulated industries.
Egon Zehnder suggests creating a board biography. “Your initial self-assessment lays the foundation for creating a focused, comprehensive story about your potential value and why you are interested in board service,” the report said. “This is not just a revised version of your CV. You want to focus on the board-relevance of your experience and keep it succinct.”
Sarah Van Dyck leads Egon Zehnder’s U.S. consumer practice and is a core member of the firm’s chief marketing and digital practices. Based in San Francisco, she advises both industry leaders and emerging disruptors on executive search, leadership development, and board advisory services. Her 25 years of experience as a marketing executive with consumer and technology companies has shown her that organizational capacity is built when courageous and compassionate leaders invest in the potential of their teams.
Articulate what you really bring to the table, said Egon Zehnder. Board searches are highly specific. Think about what sets you apart from others who have held your role. If you are a President, ask yourself what unique strategic triumphs, market knowledge, operating experience, and leadership competencies you can vividly document. If you are a CFO, you should be clear about what that has entailed, whether it’s international experience, a turnaround, or creating innovative capital structures. If you have special expertise, be sure it truly is special and that you can explain how. If part of your value might lie in the diversity you could bring, be prepared to say precisely how that might be relevant to a particular board.
It can also be useful to raise your profile. “While you cannot apply for a board seat the way you would apply for a traditional job, you can let your networks know that you are interested in board service,” said the report. “If you are a current executive, see if your company’s CEO and board members might be able to provide some guidance.”
Raise Your Profile
“You should also network with any other board members you know, with mentors or champions you have had, and with people in your business circles,” said Egon Zehnder. “You can also expand your network by joining an organization that focuses on board service. You may also want to consider raising your profile through speaking engagements, media exposure and publishing articles and research.”
Martha Josephson, based in Palo Alto, is the founder and leader of the search firm’s global digital segment, part of its technology and communications practice. She advises digital media companies in Silicon Valley and has deep experience recruiting talent to develop the digital capabilities of consumer companies. She conducts both senior management and board director searches, and provides board effectiveness consulting.
Interviewing for first-time board service, meanwhile, is similar to interviewing for a traditional executive role: The interview process for a board seat typically involves a series of conversations rather than a very formal HR interview and often begins with a phone call to gauge your interest. You will likely be interviewed by the head of the nominating committee, the board chair, and the CEO if the roles are split.
“Making your aspirations known to the board and CEO of your current company is a key first step in positioning yourself for board service,” says Egon Zehnder. “Otherwise, you might find yourself in the uncomfortable position of having to turn down an offer, which could hurt your chances with other opportunities in the future.”
Once you have been appointed to a corporate board, keep in mind that each board has a distinctive culture, cadence and way of conducting business. To get off to the best possible start, Egon Zehnder made the following suggestions:
Before your first meeting:
- Familiarize yourself with the rules and regulations governing board operations. Almost everything that transpires in board meetings and board committee meetings is subject to a web of federal and state laws and regulations, as well as the bylaws of the corporation, which lay out the rights and powers of shareholders, directors, and officers. As a director, who is presumed to be liable for the company’s actions, you should be familiar with these regulations and corporate bylaws.
Before your first board meeting, find out if there is a formal board orientation program. If not, schedule some time to meet with the general counsel to get a better understanding of the legalities and nuances that govern board deliberations.
- Give yourself enough time to prepare for your first meeting. Even veteran directors need extensive time to thoroughly prepare for board meetings. It can require hours of reviewing financial reports and other materials that directors are sent in advance (usually through an online board portal).
- Begin to get to know the board leaders well. During the interview process, you may have spent no more than 90 minutes or so with the chair. Since you won’t have a day-to-day working relationship with him or her, you should begin to forge a bond before the first board meeting. Try to get together for dinner or the like within the first month of your appointment. (You will also want to meet with the CEO if the chair and CEO roles are split.) If you know what committee you will serve on, you should also meet with its chair, not only to initiate a personal relationship but to get a feel for your responsibilities.
- Request a mentor, if one hasn’t been provided to you. Many boards have created comprehensive onboarding processes for new board members, including mentors to help directors get their bearings. If that’s not the case with your new board, ask the chair to arrange a mentor for you.
At your first meeting and beyond:
- Understand your role as a director versus the role of management. The role of directors is to govern — not to micro-manage the company or its executives. Governance includes a broad set of oversight activities: monitoring performance, ensuring compliance, maintaining ethical standards, acting as a sounding board on strategy, selecting the CEO, and making key compensation decisions. It does not include second-guessing every management decision or getting involved in day-to-day operations.
- Maintain the appropriate demeanor. A board meeting is a collaborative environment that requires modesty, a willingness to listen to multiple points of view, and thoughtful decision making.
- Represent the shareholders. Collegiality does not mean you shouldn’t ask probing questions or voice dissent. You have a fiduciary duty to use your best business judgment to represent the interests of the shareholders and to oversee the creation of long-term shareholder value.
- Know when and how to contribute to the discussion. You may have been appointed to the board for your specialized knowledge or specific experience and can reasonably be expected to contribute when a relevant issue arises. Avoid lecturing or assuming a tone of superiority in such discussions. When topics arise that you have doubts about or want to know more, pose questions that invite fact-based answers.
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Australian cabinet minister for women, Michaelia Cash, has called for a stunning new target of 50 percent for female representation across all of her country’s government boards. The current gender diversity target stands at 40 percent.
- Begin to orient yourself to the dynamics of the group. All boards have their own dynamics, which can range from exemplary cohesiveness to faction-riven dysfunction. Because these dynamics are often rooted in long histories, they may not be immediately apparent. But by closely observing the way members interact, being alert to undercurrents in the room, and trying to discern the past in the present, you can begin to determine how you might best contribute to a balanced and productive discussion over the long term.
Take these steps within the first six months of your tenure:
- Seek feedback on your performance early on. While many boards have established thoughtful and objective evaluation processes, they do not always provide enough specific feedback on individual directors. In addition, the formal evaluation of your board may not be due for another six months or longer. Don’t wait for it. After you have participated in two or more board meetings ask for feedback from the board member you feel most comfortable with. It might be your mentor or it might be another director you’ve come to admire in the course of the board’s work. Make it clear that you are looking for candor, not reassurance. When the formal board evaluation does occur, take advantage of the opportunity for additional feedback.
- Continue to build relationships outside of the meeting room. In addition to nurturing your relationships with the CEO and/or Chair and your committee chair, try to get to know the other directors as well, through dinners and on other occasions that allow informal, one-on-one conversations. Seek similar engagement with management.
- Stay current with boardroom matters and trends. Continuing education programs for directors offer you the opportunity to maintain and improve the skills necessary for the performance of your responsibilities. There’s no handbook on how to be a director, and these programs can also help keep you current on best practices in governance and on emerging issues for boards.
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media