The Changing of the Board
It’s not that long ago that sitting on a corporate Board of Directors was a social imperative. As an attainable goal, it depended on the spoon in your mouth when you were born. Silver, and the door was open. Plastic, and you should settle for getting out of the mailroom.
Things have changed, including the democratization of The Board. Outside Directors – i.e. not executives of the firm – are highly prized and increasingly highly paid. The effectiveness of a Board and its neutrality is frequently judged by the number of independents.
That’s because a well-managed organization wants to be led by experienced people who can provide both independent oversight of a sector of activity and contribute intelligently to policy and planning.
This new practicality in the approach to Boards of Directors has attracted a new professional dimension to the role. Board service has become a steadily more rewarding career experience, sought after by smart, articulate and accomplished people seeking opportunities to participate in change and improvement.
More players than seats
Aggregate statistics are not available for the way things were, but the way they are now indicate the number of qualified candidates seeking a Board seat is greater than the number of seats available. Given the slow rate of Director turnover, this pressure will likely refine and raise the qualifications required to play.
Unsurprisingly, the increasing attractiveness of the Non-Executive Director (NED) has led to specialization by headhunters and recruitment firms. Here at Cornerstone International Group we have a group specializing in Board Advisory and CEO recruitment with expert members in Europe, North America, Latin America and Asia.
“The Talent pool may seem small when there are often only a handful of men and women on a Board,” says financial services expert Lydia Goutas of Cornerstone Vienna. “But the research and recruiting process must be rigorous. Both the time commitment and liability of NED´s has greatly increased, a reflection of their influence on an organization´s success, stock price and reputation.”
New profile for Directors
In the past, favored targets would be CEOs, CFOs and presidents of companies or large divisions. But the profile is becoming more multi-faceted as business needs change in the face of digitization and technology.
A challenge for recruiters is the absence of a formalized pathway. Candidates interested in becoming Directors face a hurdle in making that interest known. You don’t apply for a seat on the board, and you don’t find them in the want ads.
Organizations seeking Directors are often limited to word-of-mouth or an updated version of the old-boy network. This is particularly troublesome with the growing presence of female Directors and a wide-spread desire in the world of corporate leadership to see many more.
Once again, the most likely solution comes not just from the world of recruiting but a very specific niche of it. The business model of the Retained Search firm is built on wide-reaching networks of people qualified in diverse ways. Not only that, but the market knowledge to know qualified people currently engaged who might consider a change of scenery from a timely approach.
Until they make “directoring” an MBA grad credit, retained search is likely to remain the best way to find a seat on a Board of Directors, and for Boards to find you.
