Most individuals find the process of joining a corporate board mysterious, even intimidating. Whom do you contact? What are the selection criteria? How do you prepare? Can you serve on a board if you are an active executive?
Finding the answers to these questions is worth the effort. Board service is an opportunity for personal and professional growth. Directors can develop new skills and gain exposure to different governance processes and leadership styles. Recognizing the value such experience can bring, corporations are becoming more open to their senior executives serving on other companies’ boards. Meanwhile, the push for increased diversity in director background and expertise has slightly raised the board turnover rate, creating more director openings.
This article offers key takeaways from more than 30 conversations with seasoned corporate board members. We conducted most of them as part of Spotlight, our joint program with Goldman Sachs to help underrepresented US director hopefuls understand the process, demands, responsibilities, and rewards of board membership.1 The insights, many of which apply to boards beyond the United States, suggest the path to corporate directorship includes six core steps: understanding the board role and your objectives, increasing your visibility, researching the company and its industry, getting the most out of the interview, selecting the right board, and finding your voice as a director.
Understand the board role and your objectives
Once you have verified that your employer allows you to serve on another company’s board, carefully consider whether you’re up for the demands of the role. Board service can require anywhere from 200 hours a year to 20-plus hours a week for boards of companies undergoing crises, and you should commit to serve at least five years. Decide how much time you could devote to board duties without their detracting from your main job—this may weigh on the type of company you choose to serve. “And don’t forget the impact of the board position on your personal and family schedules,” says a senior executive and first-time board director. “The board role will require significant coordination of calendars.”
At a high-level, the board is responsible for management oversight and providing high-level strategic direction. It has three key responsibilities: hiring and firing the CEO, overseeing long-term strategy, and guiding the company’s culture and ethics. Keep in mind, though, that differences exist around board responsibilities and liabilities depending on where the company is domiciled.
Next, consider the types of companies you would like to serve. There are significant differences between public- and private-company boards, a corporate lawyer and board director points out. “Public companies generally have stricter governance rules,” she notes. “They often have processes in place that require close attention to aspects of governance such as how insiders, including directors, behave and what a director can reveal about the company.” Private firms’ boards tend to be less formal and more fluid in structure and can thus provide first-time directors with diverse learning opportunities. These boards also have more of a “roll-up-your-sleeves mentality,” which can allow directors to have greater impact on the company and its strategic trajectory. However, one seasoned director notes that joining a company preparing for an IPO “would be very time intense and a heavy lift when it comes to establishing governance processes, policies, and committees.”
Make a list of the types of companies that align with your skills, interests, and purpose. “You want to consider what is meaningful to you—in terms of industry, company size, stage of growth—and where you can contribute,” says the head of the board practice at an executive search firm. “Think about what you know, what you have done, and where that would be valuable, particularly on your first board. Once you have board experience, you can become a valuable contributor to many other boards.” While noncompete agreements may prevent you from taking a board role within your industry, you may well be able to apply your expertise to boards in other sectors. Such a position would take you out of your comfort zone and help you broaden your experience, skills, and personal network.
Raise your visibility
Building your profile and broadening your network can benefit any professional, but these moves are particularly important for those wishing to be considered for a seat on a corporate board. Think about the experience and attributes that would be sought by the board nomination committees of the companies whose boards you are most interested in joining. These criteria may well differ from what these companies would look for in executives.
Large public companies often seek former top executives from other large companies, looking for experience in managing complex shareholder and stakeholder relationships, major acquisitions, and difficult economic times. Smaller up-and-coming firms may value current senior executives who have navigated rapid growth and can serve as sounding boards for their management teams. Functional expertise, such as experience in setting up governance processes, may be more important to them than to large corporations, especially in pre-IPO situations. Keep in mind that in a less mature organization, you may need to play a more hands-on role than on the board of an incumbent.
Board recruitment is largely relationship-driven—in short, it’s who you know. In their quest to find the right directors, boards will consider candidate suggestions from colleagues and professional acquaintances, so leverage your personal network. “Somebody has to recommend you,” says a board recruitment expert, “so you need to let your peers know this is something of interest to you and be clear about what you think you would bring to a boardroom.” But remember it’s a two-way street: should you get a call for a board opportunity that does not interest you, consider referring others in your network. In addition, look for ways to raise your profile in your industry, such as speaking at conferences, and build relationships with recruiting firms and connections on professional social media platforms.
Once you have concrete board opportunities in mind, think about how to tailor your résumé and profile on professional platforms to highlight ways you could fill gaps in those boards’ composition. For example, financial expertise would be a great fit for a board whose audit committee has members at the end of their terms, or your years of experience digitizing a company’s core business would make you a valuable resource for a board overseeing a major digital transformation. Since board members need to take a high-level, long-term perspective on the company, you should demonstrate your ability to deal with strategic topics affecting the overall organization and its future prospects. Accordingly, when positioning yourself for a board role, experience in managing changing workforce dynamics (such as remote work) or wage inflation is more relevant than in a day-to-day operations role.
Do your homework
Director hopefuls should conduct thorough due diligence on companies whose boards they would be interested in joining. You can investigate the organization’s operations, challenges, and opportunities by reading news and analyst reports and speaking with people who know the company well, including board members and senior managers. Reading through 10-K/10-Q filings, proxy statements, annual reports, or other comparable documents can give you a clear picture of the company’s health. Complementing these perspectives with insights from investment bankers, trusted advisers, consultants, or external auditors may provide a picture beyond what’s publicly available. This research can alert you to any red flags, such as the company facing an attack by activist investors. You should also study the backgrounds of current directors and top executives.
Broadening that diligence process to include the industry can help you understand where the company fits within its sector. “All industries are undergoing huge amounts of change, so potential directors will want to know how you can help the company approach these strategic decisions,” says one board director.
Make the interview a two-way conversation
By the time someone has approached you about a director opportunity, the nominating and governance committees have determined the criteria for the new board member, considered many people, and narrowed the list down to a few individuals. They have also done their own due diligence on you. During the interview, the board will look for evidence of your expertise, experience, and business acumen, and try to get a sense of you beyond what’s publicly available. How would you fit the culture of the company and the board? What values do you live by and how well do they mesh with the organization’s?
In preparing for the interview, it’s critical that you tailor your unique personal story. You should be able to concisely communicate your value proposition and be ready to share a handful of personal anecdotes that showcase who you are beyond the facts of your professional background. “This could, for example, include a story about your childhood and how it has impacted the person you are today,” says an experienced board director. It’s a good idea to seek input from trusted advisers and do dry runs of how you would share these stories. Additionally, be prepared to convey how you would bring different insights to the team, as many boards are keen to broaden their diversity, not just in race, gender, and other demographic characteristics but also in skill sets and perspectives.
While the qualities sought by boards vary, four traits will likely be present on all recruiters’ lists:
- Intellectual curiosity. The candidate needs to be open to new ideas and willing to ask management and their board peers constructive questions that challenge group thinking and help produce the best decision.
- Willingness to commit needed time. A new board member has to invest in understanding the company’s industry and operations and in preparing for meetings.
- Understanding of the director role. The board’s role is to advise and oversee a company’s management. Former and sitting executives sometimes struggle with this aspect, as they are used to operating roles and inclined to solve issues rather than advise.
- Humility and integrity. Cultural fit is critical in any board search process. Great board directors exhibit humility, integrity, and collegiality, so in interviews it’s important to avoid projecting the idea that you consider yourself the smartest person in any room. Board recruiters look for candidates who can work constructively with others on the board and within the company.
While the interview is your opportunity to present your qualifications for a board seat, remember that it should be a two-way conversation. “You will be choosing the board as much as they will be choosing you,” says a director who sits on multiple corporate boards. Ask, for example, where the recruiting committee sees you adding value and what the company’s three-, five-, and ten-year strategy is. Look for indications of the board’s decision-making process and communication style. To get a sense of how the board functions, ask how often the board engages with executives other than the CEO and meets without the CEO present. A governance expert suggests also probing how the other directors know one another. If most come from the same community or have been hand-picked by the CEO, that’s a red flag.
Ideally, you can also assess whether there is an “inside” board comprising a few select board members who form an inner circle and are the de facto decision makers. In such cases, as a new director, you may have limited opportunity to contribute materially. Reviewing proxy statements and annual reports before the meeting for overviews of key topics the board has discussed can provide some insights. Consider also confirming whether every board director is represented on at least one relevant board committee. “A board member’s job, in many ways, is to ask questions,” says a recruiter, “so the questions you come into that meeting with and how you ask them will be examples of how you think and how insightful you are.”
Select the right board
Before you decide to take on a board role, it’s a good idea to go deeper in your research to understand the company’s current performance and risks—for example, reviewing interviews and presentations by the CEO and requesting recent board decks. “Consider the CEO’s character: Is this someone for whom you would be willing to risk your own reputation?” suggests a board director who serves on multiple public-company boards.
Don’t hesitate to request information and seek input that will help you make the decision. Candidates should ask for the latest board assessment report (if the request is denied, that should give you pause) and probe the company’s approach to managing risks that may be percolating, advises a governance expert. “The organization should be willing to share all such information with you—not just the positive news—to demonstrate that you can have confidence the management team is transparent.” Another governance expert also suggests speaking with the company’s external auditors. “Usually, they are a completely underutilized resource.”
One board member pointed out the importance of seeing both far and wide. “You want to look at the company’s long-term strategy and goals and at the wider industry’s risks and challenges. With a company in financial distress, you need to have all your antennae up about the issues it will need to address.” You also want to be certain that what happens in the boardroom stays in the boardroom, and that the board speaks externally with a single voice despite sharing contrasting views during their discussions, says a legal and compliance expert.
Ultimately, your decision should be based as much on facts as on intuition. If something doesn’t feel 100 percent right, it’s probably not the right opportunity.
Find your place in the boardroom
Joining an existing director team can be intimidating, but you should remind yourself that you successfully navigated the selection process and should feel confident in the value you can add. To gain greater comfort with the board, try to meet each member before officially starting as a director, as building relationships and familiarizing yourself with the different viewpoints early can prevent conflicts down the line. New directors should also invest in getting to know the management team and key employees through a combination of formal and informal interactions to understand the business and identify top talent.
First-time directors often find it difficult initially to step away from an operator mentality. As a board director, you should be guided by the principle of “ask, don’t tell.” When a management decision seems questionable, for example, ask the executives to walk you through their rationales and thought processes, suggests a board director. Remember that your role isn’t to offer solutions but to probe and constructively challenge proposals brought by the management team to make the executives reflect on their decisions. Your objective should be to help the management team see ten steps ahead and think through all eventualities. Sitting executives are in a particularly strong position to bring perspectives from their day-to-day roles and share past experiences that shed light on the company’s current situation.
While board members should ask tough questions and not shy away from dissent, being a consistent naysayer is not helpful, says a board expert: “You cannot successfully run a business if you always see the glass as half empty. Look for the positive aspects. Companies have to move forward despite headwinds.” And maintaining a good rapport is key. After all, you are making a multiyear commitment during which you will spend a lot of time with your board colleagues as well as the CEO and management team.
To make valuable contributions during meetings, carefully review the agenda and identify areas where you can add insights. New directors often hesitate to ask questions and voice opinions, thinking they need to earn the right to speak. That’s a misconception. Boards cannot afford to have members who don’t contribute, says a director: “I would encourage new board members to participate from Day 0.” To overcome self-doubt and establish credibility, start by focusing your input on your “power alleys”—areas where you have in-depth experience. You could first test your ideas with select fellow directors who may have context on a given topic of which you may not be aware and may support you during the boardroom discussion.
Finally, carefully observe the dynamics in place and the perspectives and strengths of your board colleagues. And don’t underestimate your ability to positively influence the board and shape its culture.
Joining a board can be a rewarding learning experience if new board directors take the time to build relationships, understand the company’s culture and mission, and learn to effectively collaborate with other board directors and management. Ultimately, the success of a board depends on the willingness of its directors to work together toward a common goal, and new directors play a crucial role in shaping the board’s dynamics and achieving its objectives.
