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.
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:
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:
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.
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.
Leverage or build new networks with people who hear about board opportunities:
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):
©2022. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.
Bruce Werner is the Managing Director of Kona Advisors LLC, which provides advisory services to owners and investors of private and family-owned companies. With exceptional experience in finance, strategy, M&A, governance, and succession planning, Kona Advisors creates practical solutions to the most challenging corporate problems. Mr. Werner is an experienced Corporate Director, leading businesses through…
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