This is probably one of the frequently most asked questions that I get as the founder of ABA. I tend to have the same answer for everyone as it is a very loaded question. "Why?" Which normally takes them aback given our business and since I often ask in a similar fashion as you might ask someone why they would jump out of a perfectly good airplane without a gun to their head. What I am really asking is what are your objectives in trying to get on a board and what are you going to do once you are there? There was a recent article written in Boards and Directors Magazine by Norman Augustine who is the former Chairman and CEO of Lockheed Martin and is a member of the boards of Black and Decker Corp., ConocoPhillips, and Proctor and Gamble Co. where he analyzes the same issue. He starts with:
"This is a particularly interesting time to be asking how to get on a board - when many directors are focused on how to get off a board!"
My question as to "why" is twofold (three if you include I am trying to judge their mental state!!). First based on the answer I can tell if someone would be good on one of our boards for one of our clients. Second and just as important is to see how much someone understands the expectations about what being a "great" director or a member of one of our high level advisory boards really means. As Mr. Augustine puts it:
"I've observed that the first step in "getting on a board" is to ask why you want to be on a board. If the answer is for self-agrandizement or prestige, the reputational risks far outweigh any such benefits. Similarly, if it is for financial reward there are easier, far less risky ways to make money."
There is often a third pitfall that I have found as well. Beyond the personal agendas that can become so damaging to a company and a board culture it is often the hidden political agenda that is being pushed that can be most disruptive. I see this mentality very often with investor backed (Venture Capital or Private Equity) backed boards as well as others. I recently went to a recent Woman On Boards event in Denver where ABA had a couple of our own associates participate as panel speakers. This was a mentality that I noticed was very prevalent in some of the thinking of some of the participants and one that I saw many of the panelists warn against. That thinking was an idea that as a woman and a minority you should be on a board since there is so little minority representation on boards and that once you were there it was your responsibility to "pay it forward" and try and bring other women on the board as well.
At ABA we are all about minority representation and diverse thinking on a board but only if it is going to be for the good of the organization (for advisory boards) or its shareholders (for director roles). Some often consider this radical thinking for a minority owned firm like ABA but since we are focused on the right board members on the right boards for the right reasons (most people forget about that last part) we tend not to care about the minority status or backgrounds of our advisors or directors for our clients. We see this as the same as getting on a board because you happen to be a member of the same club, went to the same school or some other personal relationship you might have with someone else on the board. As Mr. Augustine put it:
"If it is because you have a"cause" to promote, you are not a good board candidate because your role as a director will not be to represent a single interest but to represent the interests of shareholders as a whole."
So you may be asking what would make a good board candidate? In our opinion there are three main traits (among many others) that stand out to our associates and partners at ABA when we are speaking with advisory board or board of director candidates. First to be able to think outside the box and strategically on behalf of an organization and be able to communicate those ideas to a team in such a way that challenges the team to think differently. Second, that you don't know it all, your ideas are not always the best and that you can probably learn a lot from the process and the others on the board is critical. Third that you have a high degree of ethical behavior and that your commitment to your beliefs are unwavering and you are willing to stand by those even when others may not agree with you or even criticize you for them.
Assuming you are reading this and you meet these initial criteria the question still remains; how would I recommend that you go about getting on a board? Some of these are the normal best practices and for the most part it is all about who you know or more importantly who knows you and do they know that you have board aspirations.
Chances are you are not going to get a call from a Fortune 100 company as your first board position. As a matter of fact the chances of a position like that ever opening up for most of us are slim. The sheer numbers dictate that if every Fortune 100 company had a comprised of 12 members that would mean there are only 1200 of those positions available. My recommendation would be to start with a smaller company board (downside with this strategy is that the time commitment, risk and liability are comparable with a Fortune 100 company board but the compensation can be dramatically different) where they may have a tough time attracting an operator with your talents. Some international companies may also be interested in having individuals that have the experience in business in the US markets or if you are from another country a US company maybe interested in having you on their board for those contacts and experiences as well. ABA can be helpful here as well as many of our high profile advisory boards can be used as stepping stones to a director role with our current clients or others.
Many high profile non-profit boards have some very accomplished board members that also may serve in director roles for other companies. By getting to know them, work with them and do a great job as a director of a non-profit many of these individuals may come across opportunities for you if they know you are looking for them.
Having a strategy focused on this is not a bad idea however a different approach maybe in order. Most board positions do not compensate when it comes to a yearly salary that would grab the attention of a high profile executive recruiter. NACD data for 2008 showed that the average board member was paid just under $120,000 which is not a lot when you compare it to the salaries that executive recruiters are used to dealing with. Thus they are not really incentivized to do these types of placements unless they are trying to develop a long term relationship with the company. The boards that do pay at the levels that we read about typically require an extensive resume that includes a current or previous CEO role of a Fortune 100 company, a Nobel Prize winner, or former Senator. One idea that we have had is getting to know in a more personal way the Managing Directors or Partners of these search firms and bringing them into part of your network. Knowing many of these individuals myself I can tell you that most of them have extensive networks and they often come across opportunities with smaller companies that may not be clients of theirs.
Chances are if you are at this level you have a large network of business relationships you can tap into. The easiest is with your current CEO or other members of your Executive Team. Reaching out to them and asking them for their advice and counsel is often the easiest way to get in front of these types of opportunities as they often know of them. Even better would be if you knew someone that was on a nominating or governance committee of a board for a company and ask them for their advice.
CEO's and Directors are looking for other directors that can bring expertise to their organizations. By becoming the expert in your field and standing out as such you will attract that attention. Writing white papers, having a business blog, contributing to articles or being a speaker at industry events are the surest way to stand out as an expert in your space. For example if you are an HR executive becoming a compensation expert or even have a particular industry focus and write or speak about that might be a solid strategy.
The one caveat to all of this is if Congress enacts that proposals being suggested by the SEC. Giving institutional investors access to the proxy and other current proposals could change some of these strategies dramatically. Then there is the advice Mr. Augustine which I thought was very insightful:
"the best way to be "noticed""¦"¦is to focus on carrying out your own regular responsibilities in a laudable fashion"
In the end if you are having trouble finding a good board position for your talents there is always the sure fire way to get on a board and one that I highly recommend. Start your own company and make yourself chairman.
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