So you want to join a Board of Directors? The good news is that with the extra focus on diversity, many companies are looking for female and URM candidates. Especially in California, there is a bit of a scramble to add women to boards to comply with the new legal mandate, with other states set to follow. The bad news is that it is still hyper-competitive. The toughest part is getting elected to your first board. Once you sit on your first board, especially if it’s a public company board, it is much easier to get your second or third. Here are my thoughts and suggestions on what first-timers should think about.
- Board Options
1. Board Options
Although the percentage of first-time board members elected to public company Board of Directors has steadily increased over the past decade, it is still much easier to get on a private board. There are differences in process, legal responsibilities and contributions between public company and private company boards, but both are rewarding. A VC-backed or private company board will give you great experience you can leverage to get on a public board. If you pick carefully, it’s even possible that a private company will go public, giving you the amazing experience of living through the IPO process.
Board advisory roles are a good stepping stone to full board roles. Often, advisory board members are selected because of their very specific functional expertise, and the terms are for shorter defined times. It’s a good way for a CEO to see if there is a chemistry fit with an executive, which is critical for CEO’s to have with their board members. For executives who have not (yet) reached the GM/President or CEO ranks, this is a particularly good option.
Venture-backed or private companies used to rely almost exclusively on their own networks to fill outside board roles. Early in a company’s life, board roles are filled by investors; the earlier the stage of financing, the more the founder will need/want the board to help with additional financing rounds. As a company matures they will start to increase their board to fill particular experience gaps, such as access to a new market, or experience going through the growth stages the company is about to face. This is a great time to find a board position earlier in your career.
I’m often asked if companies value non-profit board experience. The short answer is: not much. The primary role of a non-profit board is fundraising, and there usually is a “give or get” financial commitment for serving. The requirements and expectations are different enough to rarely be relevant. This shouldn’t discourage you from getting non-profit board experience, however. Besides helping make the world a better place, as most non-profits do, there is tremendous value to the networking aspect. The people you serve with may be the conduit to other opportunities.
The highest hurdle is getting the FIRST board opportunity. To do this, you must network, network, network. Ambitious executives should develop their own “Board of Advisors” — people who can help mentor you as your career grows. This needs to be both men and women, and people who are advocates, not just friends who give advice. You should seek out individuals with similar career trajectories who have broken into the board realm. Even if an executive doesn’t know the potential mentor personally … cold call them with the “ask” to get their advice and guidance. You will be surprised how eager many women — and men! — are to help others. But at the end of the day, you must be your own advocate which can be very, very hard for some women.
There is a difference between governance and management. To get to the point in your career where you are qualified to be considered for a board, you’ve had to be very good at your job. But that doesn’t mean you will be a good board member. The most common phrase used to describe good governance is “noses in, fingers out”. Quite simply this means Boards of Directors should have their noses in the business enough to understand all the issues, but not involve themselves in the operations or management of the company. Oversight, not meddling. Give advice, don’t make decisions. Knowing where that line is and not crossing it is one of the hardest but most important things a first-time board member must learn.
There are lots of options for courses or lectures on board readiness that will help you learn how to be an effective board member. Many top Universities offer programs, including Stanford, Harvard, Santa Clara & the University of Pennsylvania – Wharton. I recommend you make the time to attend/sign up for some of these educational opportunities so you understand the expectations and responsibilities. This will give you the knowledge you need when you are asked and interviewed for a board role. It also shows a recruiter and nominating committee that you take the responsibility seriously.
Being elected to a Board of Directors is a lot of work when you’re starting out. Keep up the effort — it will pay off.