If you are a successful executive in your field, you may have noticed that some of your colleagues have board appointments in addition to their ‘regular’ positions. You wonder whether or not this is for you. Do you fit any of these main typical profiles of board appointees?
1: Experienced senior executives & industry figures.
These board directors have probably held board positions for years and probably used to be a CEO and/or senior industry figure. They may plan to move out of full time employment into a portfolio of board positions as retirement approaches. They aim to stay engaged, continue to contribute to their business community and maintain energising connections. Money is not the main motivator, rather an engaged lifestyle. This is the most ’typical’ type of board member.
2: CEOs of other businesses - or people aiming for CEO positions
When CEO appointments are considered, board experience will be very highly regarded. After all, as CEO you will report to a board and need to understand board function and process, corporate governance and statuary compliance requirements. Broad experience in dealing with boards - as both executive and non-executive - will also strengthen your network.
3. Shareholder representatives
CEOs (and other executive directors) report to boards, but the boards themselves represent and are responsible for shareholder interests. That means nearly all boards have shareholder representatives as members. The most obvious example may be a growing firm with venture capital or private equity funding: the funding organisation will insist that it has one or more of its own people on the board to represent its interest.
4. Professional experts
If you are seeking your first board appointment, this is the most likely route. Boards are responsible for corporate governance, financial reporting and legal statuary compliance. Therefore professionals in these fields are in demand as board members. Most boards would like to have a members with a strong corporate finance or legal background. These people may also fall in the first three categories above. Boards are also now recognising a lack of knowledge in technology. Most businesses need to embrace and exploit technology and very few have directors who really understand the sector.
Note that the average age of board members is falling quite dramatically. This will be due to increased interest in technical/professional expertise (particularly technology) and shareholder representation.
Whichever situation you are in you need to approach non executive directorships quite differently to applying for an executive position. Note that nearly all board appointments are filled through invitation, so your main route to success will be via networking. Also bear in mind that you are not going to get paid highly for the work - if at all! Consider the following as preparation to build up your credentials:
- Attend courses with organisations that represent board and director roles & responsibilities, such as those from the AICD (in Australia). Joining such organisations is obviously a good idea.
- Create a resume specific to the board application. This will emphasise those skills and credentials most relevant to board positions: probably professional expertise, corporate governance, strategic planning, financial reporting and compliance.
- Network with everyone you know who is currently sitting on a board as a non executive director.
- Take every opportunity available to you to present to your own organisation’s board so that you can build experience and understanding of board process.
- Build a target list of companies and organisations with whom you would like to be associated and get networking.
- A great place to start is in unpaid directorships. This will include trusteeships of charities and not-for-profit organisations. These organisations operate much like any other business and have the same board responsibilities, so can be a great place to gain experience.
These are just some of the processes you can adopt in your search for a board position. Talking to search consultants who specialise in board appointments is another option available, but keep in mind that they would prefer to approach you rather than the other way around.
If you have any comments, we will be pleased to hear from you.
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