We have previously explored how to time board candidate selection and many board candidates are eager to hear whether they have been selected amongst a very competitive base of board talent. Albeit it may be slow moving, I believe that board succession agendas are shifting away from the good old boys’ club network and toward hiring board talent that brings true value to the board. So, what do boards want and what makes a great board candidate? What are the hard skills, areas of expertise and softer skills truly sought by corporate boards as they select board members? After all, a great board is truly the result of having great board members.
In my opinion and without question, the hard skills come first. Most boards gravitate to experienced business operators and executive managers, such as Chief Executive Officers who have demonstrated, successful track record and stellar P&L and EBITDA results. Oher functional skillsets include financial, accounting, audit, risk, mergers and acquisition experience, restructuring, or transformation expertise. In some cases, a highly technical skillset may be needed to help the company with innovation. Depending on the board’s agenda, experience in strategy and planning may be considered.
Expertise in sales and marketing, human resources, or legal are less desirable but we do see a shift toward greater interest in these areas as well. Many boards are also seeking cyber security expertise and certainly more so in highly regulated industries. Certainly, current or prior corporate board experience is highly valued over an executive who only has non-profit or no corporate board experience. In my mind, lack of corporate board experience is the number one objection most executives face when considered for corporate boards.
However, with today’s current crisis there is a completely new board agenda, therefore expertise in areas such as crisis management, risk mitigation, culture impact & transformation, corporate transformation, workforce strategy, remote workforce strategy, leading organizations through other recessions, cybersecurity, emergency response, corporate turnarounds, financial crisis management, Millennial and Gen Z engagement, digital transformation, disruptive events, aligning strategy and culture, or innovating through times of crisis.
Areas of Expertise
Beyond the “hard skills” just listed, there are other areas of expertise that are highly valued in today’s boardroom. Specific industry or “domain” expertise may be required. However, I have experienced cases where there is already industry expertise present on the board so, it is not so much required. The need for industry expertise truly depends on the current composition of the board and the challenges and opportunities the company is facing. The company may be trying to grow in a segment where they are struggling but there is great opportunity. We have placed board members with very niche industry expertise and connections.
Other areas of experience valued by boards can include the type of business model, whether it is growth or distressed situation, or currently global or trying to go global. The stage, such as early, mid or later stage can certainly play a factor. In addition, the size of companies where executives have experience will come into the mix. In some cases, geography may play into the equation, such as many banks like for their board members to have a regional presence and rolodex.
In my opinion, you can have all or most of the above, but judgement trumps all. You must also be motivated, as well as have the right reason and interest for serving on corporate boards and certainly in the given company’s business. The right kinds of boards and the ones that really make a difference are hard work. This is not about great board retreats, dinners and sitting around the board room table. Serving on healthy boards requires you to roll-up your sleeves, be available at just about any time, and you having the courage to ask the tough questions when needed.
Do not underestimate style and cultural fit of the board. I have personally witnessed many cases on the behalf of our clients where the board will spend several hours, days and weeks to ensure that the potential new board member will “fit” in their culture. Have your references at the ready, as I guarantee you will need them to speak on your behalf, if the company is not already scouting any other insights about you on their own.
The Bottom Line
Boards are not only there for good governance, but they are helping to solve real-world business problems. As we all know and realize, there is a tremendous spotlight on board diversity. But, what does board diversity really mean? Is it in terms of gender, ethnicity, experience, skillset or thought? Although the board may be expressing their desire for diversity, I have experienced many cases where the hard skills and areas of expertise eventually win out.
I believe more than any executive role, capturing board seats is the most competitive of all. Between great talent, only so many boards seats to go around, well-tapped networks amongst the board and their resources, board opportunities are taken and gone before most can realize there were there in the first place. It is a long journey. If you truly bring a highly differentiated value to corporate boards then this should become a reality. However, patience and perseverance should be your mantra!