Friday, January 3, 2014
How to Get on a Board
The following is adapted from a presentation I made at the American Chamber of Commerce Shanghai in November. Although the talk was directed at women, this advice is useful for anyone interested in being elected to a for-profit corporate board as a non-executive director.
A few years ago, I interviewed 12 – 15 women on the boards of US corporations when I wrote articles for CEO and CRO Magazine. These companies included Rockwell Collins, Nova Chemicals, Sky Bank, Duquesne Light Company and Central Vermont Public Service. I asked each woman I interviewed how she got her board seat. The results were fascinating and unexpected.
Benefits of Board Membership: It’s not easy to get on a board. Many board members are invited to join because of someone they know. An appointment to a board of directors holds numerous benefits. Opportunities include closer relationships with other leaders on the board that increase your network as well as give exposure to you and your company. It is also a chance to see on a much deeper level how different organizations operate. Finally, the executives of boards, particularly the chair, are powerful. They can carry significant clout in the company. A board appointment is an acknowledgement of an executive’s accomplishments and capabilities. With all these benefits, board seats are valuable and sought-after.
Here are five tips for marketing yourself to be visible to the nominating committee of a for-profit board and to the search firm that may be recruiting for it.
Put it on your radar screen: Getting a for-profit corporate board appointment may not be something many executive women think about because they have their hands full managing their careers and family.
· Put being on a for-profit board on your career radar screen and focus on it just like you would focus on any career objective. Treat your quest for a board seat like a job hunt and make a plan to raise your visibility to the right people.
Tell your boss: Of the 12 – 15 women I interviewed, most of them got their board seat because their boss recommended them. These women were senior corporate leaders so usually their bosses were the CEO, the Chairman, or business unit head. For example, someone would ask the CEO to suggest possible board members and the CEO would recommend his or her protégé.
· If one of your career objectives is to be on a board, tell your boss. If you don’t think your boss will be supportive, find a senior sponsor at your company who will think of you first when asked to recommend non-executive board candidates.Start small: Don’t begin your board seat search by aiming to be on the board of Microsoft or BP. If you look at the numbers, currently about half of the women that companies select for their boards had previous board experience. So work your way up. Look for an opportunity to be on the board of a small company, like a start-up or privately held company. In Asia, you may have the opportunity to be on your company’s joint venture board so take advantage of it. It is good experience and it looks terrific on your resume.
Be active in your local Chamber of Commerce or Rotary Club: Two of the women I interviewed were invited to be on boards because they played leadership roles in their local Chambers of Commerce or Rotary Clubs. They were visible in these organizations because they headed a committee or led a major project.
· In my informal survey, being active on the board of a non-profit like a charity or an arts organization was not as effective a marketing strategy as being active in a business organization like the Chamber of Commerce.
“Show me the money”: Research shows that women with finance backgrounds have an advantage over women in other disciplines on for-profit corporate boards. Companies prefer individuals with corporate leadership experience, industry knowledge or finance backgrounds.
· If you do not have a finance background, make sure your resume speaks clearly to the financial results you achieved in your company and uses numbers to describe your performance. The reason this is so important is that strategic decisions, couched in numbers terms are what boards consider. You need to show you speak their language.
Odgers Berndtson has a thriving Board Practice headed by Virginia Bottomley. Clients include Associated British Foods, British American Tobacco, BP, Novo Nordisk, Eurostar Group, Societe Generale and Huawei UK.
What are Corporate Non-Executive Directors paid?
Non-executive directorships at US Fortune 500 companies can pay over $300,000 a year. This is usually split between cash and stock awards. Board members at smaller corporations or privately-held companies may receive cash compensation ranging from $10,000 to $100,000 per annum as well as stock and/or stock option awards.At start-up companies where cash is scarce, board members may receive just stock and travel expenses to the board meetings. In the US, director compensation details can be found in the annual Proxy Statements of publicly-traded companies. You can usually find these in the Investor section of their websites.
In Asia, compensation to board members is less. In Hong Kong, for example, average compensation to non-executive directors ranges up to $50,000 per year.