Are You Ready To Serve on a Corporate Board?
There’s a lot of discussion going on these days about board service and why there aren’t more women on boards. Over the next few weeks we’ll discuss that and look at some strategies that might help you if you aspire to board service.
A seat at the corporate board table is an aspiration for many leaders and for good reason. Board service bundles together a host of rewarding experiences: The opportunity to be an “insider” and view, first hand, how another company works at its highest levels and the privilege to work beside and soak up the wisdom of the brightest, successful and most articulate professionals who will ever cross your path.
But there’s more. It is prestigious to serve on a corporate board, particularly when the firm is publicly-held and directors are elected by shareholders, rather than appointed by the CEO as in the case of private corporate boards. Another feature of boards of directors in large public companies is that the board tends to have more “de facto” power. Many shareholders grant proxies to the directors to vote their shares at general meetings and accept all recommendations of the board rather than try to get involved in management, since each shareholder’s power, as well as interest and information is so small.
How Boards Work
The board consists of individuals that are elected as representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. Every public company must have a board of directors. Some private and nonprofit companies have a board of directors as well.
In general, the board makes decisions on shareholders’ behalf and has a legal duty to act solely on their behalf. The board looks out for the financial well-being of the company. Such issues that fall under a board’s purview include the hiring and firing of executives, stock dividend policies, and executive compensation. In addition to those duties, a board of directors is responsible for helping a corporation set broad goals, support executives in their duties, while also ensuring the company has adequate resources at its disposal and that those resources are managed well.
My Board Experience
Over the course of my 30-year business career, I’ve been blessed with a host of “highs.” In looking back, the pinnacle experience has been (and still is) the opportunity to serve as an independent director of a NYSE, micro-cap company, Luby’s/Fuddruckers Inc. (LUB).
Here are ten reasons why I relish my corporate board seat:
- What I learn in a year of board meetings is equivalent to “renewing” my M.B.A.
- I get to contribute to corporate strategy at its highest level of complexity.
- I’ve stood shoulder-to-shoulder with my fellow board members, and our shareholders, to win a hard-fought proxy fight with a hedge fund.
- I’ve come to appreciate each of our business units’ unique corporate cultures.
- I‘m blessed to work alongside principled and accomplished fellow directors from whom I’m always learning.
- I’ve come to be comfortable with “productive conflict” even when I’m the sole voice on an issue.
- I’ve become a better listener and to be open-minded to differing perspectives.
- I’ve learned that my job as a board director is to coach and mentor the executive team. At the end of the day, they run the company.
- I’ve come to truly prize the individualized passion, wisdom and wit of my fellow board directors; and to deeply appreciate how our skills sets and idiosyncrasies unite us and keep us strong.
Fact is, serving on a corporate board has made me a better business person and matured me as a human being. I want the same for you!
Truths To Think About
For too many decades, America’s corporate boards have been filled by a chosen few.
I’m passionate about helping level the playing field and make board seats obtainable to a wider, more diverse range of talent. As I see it, the future success of our corporations and our country’s free enterprise system, depend on it.
Here’s the reality: Corporate board seats are scarce and competition is fierce.
But you don’t have to sit passively just wishing and hoping. There are actions you can take. In fact, the “right” initiatives can immeasurably increase your odds of landing a seat.
But here’s the tricky part: Joining a corporate board is by invitation only. (Sometimes board recruiters build the candidate list. But many times, the board works independently.) While the landscape is changing, direct solicitation is still considered taboo, so your actions should be carefully choreographed so that the board finds you and determines that you are just the right person for the seat. You’ll want to rely on your sponsors and supporters to do the initial canvassing for you.
Your Time Is Now
In my opinion there is no better time than today to start working on earning a board seat. For one thing, most all of the information that you’ll need is online. Instead of hoping you serendipitously hear about a recently vacated board seat, that information will be readily available on the internet. You might even be able to glean what they are looking for in a replacement and who else on the board you may know or be a degree or two separated from.
The most important thing is to determine if you are board ready. If you are, then let’s learn together how to earn that seat that you think would be the best fit for you.