What to Contemplate When Considering a Board Seat
For seasoned, senior-level executives, adding “Board Membership” to their resumes is an intriguing next step. They know that joining a corporate board will raise their profiles, add weight to their experience and demonstrate their professional expertise – beyond the boundaries of their “day jobs.”
But, the value of a board seat depends on both your performance and commitment. It’s not enough to simply “be on a board.” You need a willingness to commit real hours to solving real problems. A strong performance can open up opportunities you’ve aspired to for years; failing can damage your reputation and limit your options for the future.
Ken Martin, WinterWyman Executive Search’s SVP and Partner, recently discussed the topic with Julie Bradley, a trusted business associate. Bradley emphasized, “the important thing is to go into each board opportunity with your eyes open.” And she would know. Bradley is former Chief Financial Officer of TripAdvisor, member of the board of Blue Apron and Wayfair among others, and past board member of Constant Contact and ExactTarget. She has a clear perspective on how executives can take their work experience and effectively apply it to board leadership.
To start, Bradley said, “don’t set your sights on just any board - look for the opportunities that match your skills, experience and interests. You want a place where you can be passionate and add value.” Finding the right board, she believes, requires “a lot of due diligence and a clear idea of what you can contribute. Just because you’re the CFO of a good-sized business doesn’t mean you’re ready for a seat on the audit committee of a public company.”
A Long-Term Game
Positioning yourself for a board seat requires time, thought and performance. As Bradley says, “The best way to make yourself attractive is to kill it at your current job.” And because you want to begin contributing as quickly as possible, it’s imperative to have a deep understanding of the potential board’s business. “I wouldn’t be a good candidate for a biotech company’s board,” Bradley believes. Instead, her experience as a financial executive at TripAdvisor, software provider ATG and cloud platform provider Akamai Technologies neatly align with her board work at technology-based Blue Apron and online retailer Wayfair.
It’s also important to understand how boards operate. Typically, they look for a certain type of executive for each seat. For example, they may want a CEO to fill one slot and a finance expert to fill another. “Understanding what they’re looking for is really important,” Bradley observed. “If they don’t know what they want, that’s a red flag.”
Of course, before you can evaluate whether a board is the right fit for you, you have to identify boards that might interest you in the first place. Sometimes, the opportunity will appear randomly. Bradley’s first two boards recruited her because their companies were looking for CFOs. She didn’t want the jobs, but expressed interest in the board seats. “You never know where the approach will come from,” she said. “It could be a casual conversation with an insider, who introduces you to the CEO.”
A key to finding opportunities is standing out in your current job. Exceptional performance gets the attention of executives looking for board members with your talents. Another thing to bear in mind is timing: Don’t wait until you’re within striking distance of retirement age to position yourself—start thinking about your strategy early. Get noticed by speaking at conferences, constantly networking and by being able to deftly articulate what makes you exceptional in your field.
Due Diligence is Everything
Though board seats certainly offer opportunity, they also come with risk. Conducting thorough, cold-eyed due diligence is an absolute necessity before you agree to sign on.
Besides studying the company’s financial performance and market position, weigh the experience and performance of the CEO and board members, along with the track records of its outside advisors, counsel and auditors. Have your attorney review the organization’s directors’ and officers’ liability insurance to make sure you’ll be adequately protected. When you’re done, examine the bigger picture painted by all this information to make sure you’re comfortable with the level of risk you’ll be taking on.
For example, Bradley tends to stay away from organizations with short-term, aggressive strategies. “I’m more interested in companies with long-term visions,” she said. “You want to understand the company’s pressures and motivators, and it all has to match your risk profile.”
Throughout the process, the company should be forthcoming in providing you with information and allowing you to speak with individuals throughout the organization. “If you ask and they won’t let you talk to someone, you have to ask why,” Bradley said.
Be Honest with Yourself
As you begin the process, ask yourself some hard questions: Are you truly qualified? Can you meet the necessary time commitments? Board work involves more than attending four meetings a year—committee work, for example, requires additional time and can heat up fast in a crisis or when an opportunity presents itself.
Also, are you comfortable in an advisor’s role? If you like to get your hands dirty, you may not be happy being separated from operations. When it comes down to it, the board’s job is to advise the executive team and oversee the chief executive. “If your board feels like it has to run the company, it may be time for a CEO change,” Bradley said.
In the end, you have to be clear-eyed throughout the entire process. It’s not enough to want to be on a board. You must consider the company, its players, the role you’ll play and how they all align with your experience and interests.