The challenge: landing that first corporate board seat
Aspiring directors in Colorado often ask me how they obtain their first public company board seat. Many challenges exist. Finding a corporate board seat is not the same process as a job search. You do not apply; the company finds you. Another challenge is that most directors of medium and larger size Colorado public companies do not live in Colorado since these companies seek the most qualified directors they can find regardless of location.
I point out these challenges and offer a few suggestions for an action plan to overcome the hurdles if an aspiring director’s motives are appropriate – to help a company succeed and to learn from, and contribute to, the board of directors rather than seeking prestige and financial gain.
Understand what corporate boards do and how they function – To complement your business background in this respect, attend the Annual Corporate Governance Conference in Washington, DC of National Association of Corporate Directors® (NACD) (www.NACDonline.org). Take a NACD Director Professionalism® course or attend a conference or course offered by other credible educational organizations. Learn the basics about the functions of a board of directors. Speak with active directors about their fiduciary responsibilities. Leave your “noble causes” at home; directors represent all shareholders, not a certain group, and their responsibility is what is best for the corporation. Into the Boardroom – How to Get Your First Seat on a Corporate Board by Dorothy Light, a Colorado resident, and Katie Pushor is one of the few books on this subject.
Start smaller and think Colorado – Unless you already have a national profile, you can become known much easier in Colorado than nationally. Do not expect Fortune 500 companies to call you unless you are a corporate titan or former Member of Congress. Anyway, only eight such companies are located in Colorado, totaling less than 100 directorships. Instead, identify smaller companies in ColoradoBiz Magazine’s 2010 Top 100 Public Companies (www.cobizmag.com/lists/top-100-public-companies-2010) that are in industries where your existing skills and experience would be of benefit. In addition, private companies, which are in a position to go public in the future, will eventually need independent directors when an investor’s exit strategy is an IPO. Since January 1, 2008 until now, a low point in “going public” activity, only five Colorado companies had an IPO.
On a more optimistic note, according to the quarterly MoneyTree Report developed by PricewaterhouseCoopers LLP and the National Venture Capital Association, venture capital firms made 131 investments in Colorado private companies in the period January 1, 2009 through September 30, 2010, a small portion of which will become publicly-held. Learn what you can about these companies. Determine who their board members, major shareholders and corporate service providers are and devise a strategy to become known to them as part of your overall networking process.
Develop a board-oriented resume – Raise your chances of securing a board seat by having a current, board-oriented resume. Google your name to see what already exists on the web about you. Develop a resume that highlights your work experiences which will be of interest and assistance to corporate boards by demonstrating your successful track record in your career field. Do not over emphasize technical skills as your “search” will be for a board seat, not a consultant or employee position. Speak at local or regional industry conferences or write articles about corporate governance or management subjects as enhancements to your resume.
Distribute your resume to your professional network. File your resume, and try to meet, with regional and local executive search firms which have clients that would consider aspiring directors. The national executive search firms have designated websites where qualified corporate board candidates may submit their resumes and be added to their pool of candidates; although, these national firms will not produce opportunities for most local aspiring directors except in limited circumstances.
The national exposure cannot hurt you though. Submit your candidate profile for board opportunities on the web-based NACD Directors Registry®, where searching companies come to specify skills and experience necessary to fulfill their strategic needs. Establish a professional profile on Linkedin (www.linkedin.com), an accepted business-oriented social networking site, to connect with others and to make your resume easy to find on the internet.
Serve on other types of boards first – Advisory and large non-profit board service can often be a “first step” in obtaining a corporate board seat. Although non-profit board service does not really qualify as corporate board experience, such service is still helpful to you. You learn basic board governance processes and obtain an opportunity to network with corporate community leaders who might be in a position to recommend you later for a corporate board seat.
Advisory boards are different from corporate boards where directors have fiduciary responsibilities; instead, they are “advisors” to the CEO usually in technical or other specialized areas. Advisory board service builds your credentials at a particular company or in an industry with which you already have knowledge and increases networking opportunities. Colorado-based Advisory Board Architects (www.advisoryboardarchitects.com) forms, staffs and manages advisory boards for companies.
Network and build a community profile – The key to finding a board seat locally is network, network, network! Reasons for offering people board seats include the need for someone with skills and experience matching the strategic needs of the company or for a SOX Act defined “audit committee financial expert”. Although many boards seek candidates with CEO experience, there is a trend to recruit other C-suite executives, including those in finance and accounting, investor relations, human resources, marketing and, especially, operations. If you have these qualifications, devise a way to be found.
I obtained each of my five Colorado board seats by a profile in the local business community, referrals or personal contacts. Personal and professional referrals play a large part in director searches by smaller Colorado companies. Let business associates and friends know you are interested in corporate board service; but, do not directly seek a specific company’s board seat. Become acquainted with attorneys, CPAs, bankers, executive compensation consultants and other corporate advisers who are in a position to recommend you. Share your resume with current and former corporate directors whom you know. Participate in organizations where venture capitalists attend. Join NACD and attend meetings of the Colorado Chapter (www.NACD-Colorado.org) where you will meet serving directors as well as become more educated on important governance issues which enhance your attractiveness as a board candidate.
Your first board seat is the hardest to find. Obtaining a corporate board position is a challenging task which requires a personal action plan and hard work for you to be successful; however, once you obtain your first corporate board seat, additional director opportunities will come easier.