Landing a Corporate Board Seat: Step 1
I work with board members every day and I hear many of the same comments. Some of them range from “I’m looking for material on this topic” or “What does your governance survey say about…” It’s all part of my role and I very much enjoy what I do.
However, recently I’ve heard a more common question: “How do I land my next board seat?” It’s a simple answer with some very real and complicated solutions. How do we get there? This series will tackle this question in short order so that my directors can learn more about the process.
Step 1: Soul Searching
Many directors find that they have time for civic activities, like serving on a nonprofit board while running their company and taking their kids to soccer practice. Some think that they can handle three or four corporate boards while serving as a C-Suite officer. Sadly, these individuals are misguided in that they THINK they have time.
Corporate board directorship is a significant time commitment, often consuming over 200 hours annually for a corporate board. That number jumps significantly for nonprofit boards. Directors should evaluate whether they have the requisite time availability to serve on a board, especially a corporate board.
As well, there is a misguided assumption that finding a corporate board seat is a simple, straightforward task. The process of finding a directorship can take several years to find and requires an incredible amount of networking to achieve this goal. Read that again… it can take years to find a seat on a corporate board, mostly because the turnover is so low.
That brings me to my next point — turnover. Corporate board turnover is incredibly low, less than 10% annually on average, according a Korn Ferry study (KFMC2014) on tech board leaders. That same found that around 1,200 board seats were open during that time. Imagine 100,000 or more people vying for just over 1,200 open corporate board seats — it’s basically a frenzy of directors playing musical chairs… except the music just turned off.
Not only is the turnover incredibly low, we have to assume the basic demographic shift is occurring. As directors begin to age-out at their current boards, we find that boards, especially public ones, are seeking diversity. The 2015 study (KFMC2015) found a startling revelation that boards are not only getting more diverse… they’re getting younger. The study found that 1 in 6 new board placements were under the age of 50 — that’s a stark reality for boomers heading into retirement.
Finally, it’s important to realize that not all directors have the right skills for the boards they seek. For example, if you have experience in your community with leading civic boards and started your own company with revenues under $10 million, the chances of getting on Microsoft or Coke’s board is incredibly remote.
Did you know that very recently, many boards have not started to focus on how to combat an activist investor? These activists seek out the directors they know are vulnerable to attacks and single them out. Some stories have included the release of very, very personal information in an effort to start a proxy fight. Are you ready and willing to be challenged at least once while serving on a public board? You should be prepared because it could actually happen — ask Yahoo and Darden Restaurants.
That being said, don’t downplay your other experiences. It’s entirely possible that you have just the right skills that other boards are seeking. Even if you don’t get on a large Fortune 100 or F50 board, it’s entirely possible that a smaller private or public company may need your leadership skills. Essentially, understand where you can be reasonably successful and aim for success.
So, what does this have to do with me, you ask? It’s got everything to do with you. You should be evaluating if you have the right background, skills, and marketable expertise to sit on a board, especially a corporate board. It’s imperative that you understand that there is a serious time commitment, that the process is extremely long and drawn-out, and that you have to have the right personality and background.
You should do some serious soul-searching to determine if you can handle the legal liabilities, cultural changes, and openness of serving on a public board. It’s not the good ‘ole boys club anymore — this is very real, very highly regulated, and carries serious legal implications. However, it’s also the chance to make real, meaningful impact and change on a public organization.
If you think that it’s not the right fit for you, then consider a private board. Although much less publicized, they also get paid and have an easier experience. The choice is yours — it’s a risk vs. reward scenario.