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C-Suite to Boardroom: The Traits an Experienced Executive Needs to Be an Effective Director

From CEO to Chairman, Executives and Board Members Require Very Different Leadership Styles

If you are an experienced CEO, CFO or high-level executive, you may be thinking about putting your hat in the ring to be a board director of another company. Or, perhaps you are the owner or a board member of a company looking for an outside, independent director. Either way, while it is true that an experienced executive may make an effective board member, you must understand that there are key differences between being a director and an executive.

Can a Company’s CEO Also Be On Its Board of Directors?

In the governance and management structure of a company, the CEO must consult the board of directors before making major, strategic moves for the company. The board also fires or appoints CEOs. While it’s possible for a CEO to be the board chairman of its own company—and many company executives sit on the board as directors to give internal insight—it also raises questions about the monitoring of the company’s direction. It also raises questions about the CEO’s level of power, accountability and the need for another high-level leader to raise important questions to the CEO.

This article focuses on appointing high-level executives as outside or independent directors for another company. Doing both jobs well requires two very different skill sets and leadership styles.

The Difference Between the CEO and the Board Director

Success in the C-suite is not the same as success in the boardroom. Director styles of behavior and boardroom dynamics require a collegial style of intellectual engagement and rigor. Directors are bound by both a duty of care and a duty of loyalty. Directors have grave responsibilities, but they should not make operating decisions. They should not direct staff, other than direct reports to the board. The common phrase applicable here is “noses in, fingers out”.

Candidates with strong executive styles tend to be very directive in their behaviors; they employ a command-and-control approach to interaction. Successful directors, on the other hand, need to be active listeners and highly collaborative. Demonstrating this style shift from the former to the latter is a critical part of the interview process, and candidates often fail to advance if they cannot quickly demonstrate their ability to behave as a good director should.

How an Executive Can Demonstrate Candidacy for a Board

Candidates need to be able to have a fierce argument in the boardroom and then enjoy a lunch break with the sparring partner.

Candidates also need to pass the airplane test. If the current director(s) does not look forward to flying across the country sitting next to the candidate, why invite him/her to join as a board member?

As a board member candidate, here are a few things that should be watched during the interview process:

  • Be mindful of your talk time. Listen more, talk less. (Get the Hamilton reference?)
  • Do not rush to fill dead air time. Be patient and understand that silence is a sign of mental activity.
  • Don’t oversell yourself.
  • Ask truly insightful questions that demonstrate your comprehension of the dialogue; don’t just walk through a list of prepared questions.

Successful candidates need to demonstrate the judgment to properly balance the informational needs of everyone in the interview. It is a good test of how one will behave in the boardroom.

Candidates spend considerable effort to prepare their resume, bio and cover letter; they have prepared their responses to the likely questions and studied the company and the industry. All that happens before walking into the first interview. You and all your competitors for the position have been granted the interview, because you are all deemed to have the skills and experience to be a good director. The interviewers are likely focused on chemistry: does the candidate have the right temperament to fit the board and culture?

Candidates need to be listening for verbal and non-verbal clues to adjust their behavior during the interview. Are you fitting in or not? Are you balancing leadership with the need to let other directors speak and lead when it is appropriate?

Understand the Executive and Directors’ Roles

Experience as an executive is certainly a positive in terms of providing you with the skills and experience to be an effective director. You simply need to understand that the two jobs are indeed different, and they require very different styles.

[Editor’s Note: To learn more about this and related topics, you may want to attend the following webinars: The Effective Director and Roles & Responsibilities: a Primer. This is an updated version of an article originally published on January 11, 2019.]

©All Rights Reserved. April, 2021.  DailyDACTM, LLC d/b/a/ Financial PoiseTM

About Bruce Werner

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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