Advice for Securing Your First Board Seat

With millions of private companies in the US and a robust economy, it may seem that securing a board seat on a private company board should be less difficult than it was in the past. However, with increasing competition for board seats and the emphasis on diversity, board positions are more competitive than ever before.

Assumptions You’ve Made About Boards and Guidance for Obtaining a Board Seat

Most private companies under $100 Million in revenue don’t typically have a functioning fiduciary board since their governance needs have not evolved such that they can’t function without it. They do tend to think about an advisory board as they grow through $25M-$30M in revenue since their challenges require perspective and/or experience that the owners typically don’t have themselves.

For companies with boards, there are typically only three seats assigned to outsiders. There tends to be little turnover, due to how terms are structured, and the rate of retirement is minimal.

The supply of qualified candidates is multiples larger than the number of open seats at any time. If you think about how many people who annually transition from full-time employment to board work plus a lighter workload, the imbalance is clear.

Over the last 5 years, I have been involved in coaching hundreds of people on the board search process. For the typical candidate, here is where the conversation usually starts:

• Finding your first board seat is likely to take years, not months. There is no assurance it will ever happen, either.
• For any open board seat, the search committee receives anywhere from 100 to 500 resumes, meaning that you may not hear back from the organizations conducting the search. Given these numbers, regardless of your qualifications or level of effort, your chances are less than 1% at the best.
• Gaining a board seat is more difficult than securing an executive role in an organization. The most effective way to improve your chances of securing a board seat is through relationships. The operative phrase is “its who knows you, not who you know.” You still need to do all the things cited below, but who knows you, and will recommend you, is the board equivalent of driving in the express lane.
• Many board members advise that the more direct you are in soliciting for an open seat, the less successful you may be. The best way to show that you may be board material is to demonstrate judgement and tact while selling yourself at the same time.
• Be cautious with pre-paid board search organizations; caveat emptor.

Measures to Take for Securing a Board Seat

Well-functioning boards are carefully constructed to have the right combination of industry and functional expertise, governance experience, and other talents demanded by the situation. Each board is unique to the business it serves.

For newer boards in particular, a board matrix will identify candidates by the seat they are competing to fill (e.g., industry expertise, marketing expertise).

Before conducting outreach, prepare your resume, bio, and other materials to clearly differentiate yourself from others in the intense competition for board seats. Be ready to clearly communicate what you bring to the situation, why it is unique and valuable to the firm, and why you want to be on this board. Your communications should focus on:

• Industry expertise— identify the few key industries in which you have demonstrated expertise
• Functional expertise— pinpoint your areas of functional expertise sought by boards.
• Unique skills– if you don’t check the box for industry or functional expertise, what do you bring that moves their needle?
• Personal attributes— what sets you apart from a personality and character perspective?

Start your marketing by reaching out to people you know and who are likely to know where the open seats may be, whether today or the near-term. Remember, you are likely to need to nurse these relationships for years before they bear fruit. These people know you the best and are best suited for keeping you “top of mind” when they encounter board opportunities.

• Maintain or revitalize your network. Ask yourself: who in my network is in the flow of board seat opportunities? These people will become your high priority networking opportunities.
• Reach out to these people to rekindle past conversations. Let them know what you’re doing in your career, indicate your interest in developing yourself for board service, and highlight why you’d be a great board member.

How to Start Revitalizing Your Network

You should consider building a database of specific companies for which you might be a good fit as a board member; then, start the relationship building.

• Once you have a list of names, dig deeper to understand their situation. Review public filings, trade magazines, and press releases as a starting point.
• Identify their directors, advisors, attorneys, CPAs, and consultants. Use LinkedIn to see if someone in your network can make a warm introduction.
• Before reaching out, research the individual. What are their interests and associations as defined in LinkedIn? There may be interests or associations you share that can facilitate relationship building.
• A direct introduction from someone in your network to the board member of interest is an effective way to start a dialogue.
• The objective for this outreach is to build relationships and receive useful advice on the board search process. It is considered impolite to directly ask about a board opening unless your relationship is strong enough to have earned that privilege. Board members place their organization’s interests first, and they will not readily recommend someone they do not know, like, and trust.
• Ask for advice about something meaningful such as best practices for preparing for board service. For any relationship you are trying to build, you likely have two “portfolios” to discuss as you get acquainted:
  1. The current role you play in your career narrative.
  2. The independent director role for which you are preparing.
• Genuineness and patience are vitally important. Your efforts and dialogue should be focused on building a sound business relationship, not narrowly focused on securing an unfair advantage in the interview process.

Leverage or build new networks with people who hear about board opportunities:

• Many people recommend building relationships with PE firms; PE firms will have an interest in you if you have industry-recognized expertise or if you can be pivotal in helping them to exit their investment. You should already know if you fit that description. PE firms tend to be industry-specific in their board recruiting processes.
• Dedicate some of your effort to turnaround shops, corporate attorneys, estate attorneys, valuation firms, managing partners of CPA firms, and investment bankers. These are the individuals who regularly interface with the people making decisions about board seats.
• Join and participate in board organizations, like PDA and NACD, and industry associations that reflect your expertise.

Additional Ways to Build Your Portfolio to Highlight Your Skillset

Serving on non-profit boards is a logical step that accentuates your interest in serving on boards and learning about board governance. It will also provide valuable experience at the committee level. This is an obvious way to distinguish yourself from other candidates.

You should continue to develop your reputation as a thought leader. This demonstrates your functional and industry expertise and strengthens your personal brand. Be sure to use all relevant channels of social media to reach the people who can refer you to an opening. Use a tone of voice and demeanor that represents how a strong board candidate should present themselves.

Numerous retained search firms have reputable board practices. Try to identify firms which specialize in your area of focus. Otherwise, you may be wasting your time. Typically, these firms have an intake process on their web sites. If you choose to reach out to these firms for networking, be aware that they may not respond, considering the volume of inquiries they receive for a limited number of board seats.

Securing a board role is ultimately about personality and fit, and only through a genuine relationship can someone learn those attributes about you.

Author’s Note: A special thanks to Verna E. Lynch for her help in preparing this article.

Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can listen to at your leisure and each include a comprehensive customer PowerPoint about the topic):

• The Effective Board
• Roles & Responsibilities: a Primer
• The Role of the Board in a Private Company

©2022. DailyDAC^TM, LLC d/b/a/ Financial Poise^TM. This article is subject to the disclaimers found here.