Angling for a Board Seat?
Every time a new corporate scandal unfolds, executives come out looking sinister and corporate directors seem just plain dumb. How many times have you thought you could do a better job than any of those directors?
If you think you're up to the task, you couldn't have picked a better time to seek a board seat. With new governance rules placing a premium on independent directors, many boards are on the prowl for new members, and they aren't limiting themselves to the executive suite. True, landing a spot on General Electric's board (GE ) is still a stretch for a first-time candidate. But with the right credentials, finding a seat on a less prestigious board is now well within your reach.
Headhunters who specialize in board searches say the best place to start is with ruthless self-examination. Boards still want directors who are sitting CEOs, but many are willing to recruit a second- or even third-in-command today, figuring that the candidate will occupy the top job before long. Almost as important to a recruiting board: specific skills that fill a niche. If a board is replacing a director whose specialty is marketing, your background in chemical engineering won't help. Another big plus is diversity. All other things being equal, women and minority candidates are in high demand, especially among all-white, all-male boards.
If your résumé can use polishing, a director wannabe has several options. Many schools--including Stanford, Wharton, and the University of Georgia--host "directors colleges," where board members and aspiring directors learn the basics of finance, governance, and ethics. Attending not only demonstrates your interest in board service, it gets you face time with directors, who may be able to offer leads on openings.
Industry associations, community activities, and charitable groups will also raise your profile. "Most people, particularly in middle management, tend to put their head down and spend less time thinking about the outside world," says Julie Daum, who heads Spencer Stuart's board-search practice. "It's your reputation in the outside world that will get you on the board."
Networking, headhunters say, is critically important for any director candidate. That's how Pamela Nicholson landed her first board seat. After the senior vice-president told her CEO at Enterprise Rent-A-Car, Andrew Taylor, that she was interested in board service, he recommended her for an Energizer Holdings (ENR ) board seat that he had declined, citing other commitments. Glenda Price, the president of Marygrove College in Detroit, was recommended by a colleague for a seat on the Compuware (CPWR ) board that she landed on Oct. 1. Says Price: "I wasn't seeking it and I wasn't aware I was being considered for it. It came out of the blue."
If you don't have a network of business professionals who may be helpful in your search, create one from scratch. Jeff Christian, CEO of the Cleveland-based search firm Christian & Timbers, advises business professors to tap into the rich vein of fellow academics who frequently sit on corporate boards, and for mid- or senior-level managers to volunteer to make or assist in presentations to their own company's board. Peter Crist, the vice-chairman of Korn/Ferry International, recommends buttonholing lawyers, accounting partners, and investment bankers, who frequently have an inside track on board openings. Says Crist: "If you're looking to be the product, you have to network appropriately."
Perhaps the best way to land a board seat is to work with a headhunter. While most search firms are retained by boards, not would-be directors, they're uniquely positioned to match your skills and abilities with the right board. Some, like Korn/Ferry, have programs designed to locate newcomers to board service--a group boards increasingly are turning to as more traditional candidates, such as CEOs, scale back on board commitments.
Once a potential match is made, the process of winnowing the field of candidates begins. Search firms will start with perhaps 100 candidates for a single vacancy. Working with the board's nominating committee, the headhunter whittles the number down to 20 or so, then eventually to five--eliminating anyone who lacks the requisite skills, fails a background check, has business ties to the company, or isn't interested.
Candidates who make the cut are advised to study up. You should read everything written on the company, especially the financials, and determine if the company has adequate liability coverage for directors. Next comes the interview with the board members. Here the board is looking for qualities that don't come through on paper: questions that demonstrate your knowledge and insight, enthusiasm for the job, and chemistry. "They want people with backbone, but who are capable of working in a group," says Crist. "They're looking for raw intelligence. And you've got to be willing to work."
If chosen by the nominating committee, your name and short biography will appear in the proxy, and the election will be at the annual meeting. Since shareholders can't vote against you--they can only withhold their votes--the election is usually a forgone conclusion. Those who don't get the nod shouldn't burn any bridges. Ask the search firm why you weren't chosen. A gracious note to the CEO wouldn't hurt either.
By Louis Lavelle
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