Coinciding with the US State of Women summit at the White House on Tuesday, June 14th, several reports were published about the still dire state of women on corporate boards. According to a new report by nonprofit Catalyst and EY, men held more than 80% of all S&P 500 board seats in 2015. In fact, if we measure this across all U.S. corporate boards, including both private and public companies, then we learn that this percentage has been stuck in the 12 to 13 percent range for about a decade. SharpAlice, together with several other organizations and initiatives is keen to help change that. To that end we have decided to dedicate this week’s blog post completely to the topic of women on boards. We will discuss what’s in it for you, what the difference is between operational leadership and leadership in the board room, how to position yourself for your first board seat , how to go about finding a board seat, and much more.
What’s in it for you?
Joining a board is a great way to round out and complement your operational experience. It is a way to broaden yourself as an executive outside your functional area of expertise, as well as to learn about new industries beyond your own, and to gain new perspectives about how other companies operate and use other styles of management. Moreover, if you are an executive on track to become a CEO, then being a board director is a great opportunity to see what boards are looking for from a CEO.
What does a board director really do?
It is key to realize that as a board director you are not there to run the company. Instead, as a board director your role is to provide oversight by asking questions, suggesting who they should talk to for further input or help on an issue, and outlining to them the choices they have.
As a board member you really need to steer clear of giving advice as you don’t have the full picture. As Jennifer Tejada, tech CEO, investor and seasoned board director explained to us at our recent SharpAlice Breakfast Round Table about Women on Boards: “The information you receive about the company is heavily filtered. The moment you start advising you are in someway influencing the CEO without the full picture, because the information you are working from has already been influenced by someone else’s perspective and cleansed by the executive team.”
Another key reason for not giving advice is that when you are on a public company board, you want to make especially sure that you do not have undue influence on a CEO, as that would literally compromise the clarity of your oversight of the CEOs performance.
Lastly, as a board director you are not there to second-guess or critique the company’s strategy in your specific area of expertise.
Taken together, as Jennifer Tejada neatly summed it up for us, “As a board member you influence. As an executive you activate.” So focus on asking questions and don’t advise. Your role as a board director is to broaden the perspective of the CEO in order to help him or her make the best possible decisions.
But what if a board director has a really great idea or solution?
This question also came up in a conversation between Diane Green, founder of VMware and seasoned corporate board director and VC Marc Andreesen. Diane Green asserted that she would NEVER suggest anything, while Marc Andreesen said he doesn’t air his ideas during board meetings, but that he does share them as “take them or leave them ideas” in his 1:1s with the CEOs of the boards he serves on. Greene said she found that risky as it requires a strong management team to not get distracted by “suggestions from the board”.
What is the role of an Independent Board Director?
An independent director (also sometimes known as an outside director) is a director (member) of a board of directors who does not have a material or pecuniary relationship with the company or related persons, except sitting fees. Independent directors also do not own shares in the company.
Independent board members provide the CEO with an important counterbalance to the voices of the investors on the board. For a CEO it is incredibly valuable to have directors on their board who, unlike their financial investors, really know what it is like to be an operating executive. In addition, independent directors are often added to a board to provide specific domain expertise or access to a particular network of contacts that are key to the future growth of the business.
Should I seek to join a public company board or a private company board?
It is important to understand that on a public company board the emphasis is on the governance and oversight of the company. Public Company Boards tend to also be run more formally and the committee work is more intense. There also is more pressure on the board, because there simply is more at stake. However, this should not be a reason to avoid joining a public company board, as it also provides some great learning opportunities.
On a private company board the emphasis tends to be more on helping the CEO be as successful as possible – i.e., the board plays a more advisory role (though note, through influence and not through providing specific advise). In fact, boards of early stage venture-backed companies are often made up of individuals who can help fill in some of the skill gaps of the company’s executive management.
In the end, the choice of which type of board is right for you really depends on a mix of aspects: Is this a CEO you believe in and want to serve? Are you passionate about the company’s products & services? Have you got experience or expertise or a network that makes you uniquely useful to this company’s board? Have you got the time to put in the effort to be a truly effective board director for this company?
How to manage your relationship with the CEO and the management team
Your main relationship is with the CEO. As a board member you are and want to be the CEO’s trusted advisor but you also have to be willing to fire the CEO if he or she doesn’t deliver. (This is why you may want to think twice about joining the board of a company where one of your friends is the CEO.)
Secondly, as a board member your relationship with the rest of the executive team should be through the CEO. The CEO may choose to invite the rest of the executive team to a board dinner or to the actual board meeting, but any interactions between a board director and the management team outside of that should be sanctioned by the CEO.
Board commitment – i.e., what does it involve?
“If you are going to take a board seat you need to be prepared to loose sleep over that company,” says Jennifer Tejada, tech CEO, investor and seasoned board director. Just reading the board pack isn’t good enough. You have to really be passionate and knowledgeable about the company’s products & services, as well as those of its competitors. You have to really study the board pack in advance and come with questions.
Moreover, you want to make sure you have the time to actually attend the meetings, including the time to prepare and the necessary travel time. Most public boards meet once a quarter, but private boards can meet as frequently as once a month. So you need to make sure in advance that you can actually spend that time away from your full time job or other responsibilities.
Do you have to be a CEO to become a board director?
There is a misconception that you need to have been a CEO yourself to become a board director. In the past serving on a board of directors was indeed seen as an encore career for retired leaders. However, in recent years there has been a shift. Boards are increasingly looking for seated executives. The benefit of this is that they bring real time insight and expertise in this fast-paced and fast-changing world, something retired leaders wouldn’t be able to do.
Boards are also looking to add board members who can help connect them more closely or directly to their changing customer base or work force.
(By the way, there is actually a potential downside to adding sitting CEOs to the board of another company. Because when things go sideways with a company,then the Board will have to spend considerably more time with the business then usual, which is often very difficult for sitting CEOs. )
What are your board super powers?
Before you start looking for a board seat you need to ask yourself how you can be uniquely useful to a board? I.e. what are your board super powers? Note that this is not simply about your functional expertise but about the unique mix of your industry & functional expertise and experience.
For example, you may have been in software and have sold or marketed to a certain industry vertical. As a result you really know those players inside out, their strategies , etc. That is truly valuable competitive insight for any board of directors of the companies within that vertical. So don’t just look at boards within your own industry, but also the ones you have sold or marketed to or partnered with.
Similarly, what unique domain expertise can you bring that certain types of companies are really looking for? For example, can you leverage your digital, ecommerce or tech experience to help more traditional B2C companies navigate the digital transition? Do you have the cyber security background to help a board ensure that the business has taken all the correct measures to protect its information systems from theft or damage to the hardware, the software, and to the information on them, as well as from disruption or misdirection of the services they provide?
Or can you leverage your experience launching new products or companies to help other boards with go-to-market issues? Or do you have a specific geographic expertise that could be useful – e.g.. Do you have experience growing a business in Europe for US companies who want to expand into Europe? Or do you have experience with M&A or taking a company through an IPO?
Once you have identified your board super powers, you have to make sure you really headline them on your specific board resume (i.e., this is a separate resume solely intended for your search for a board seat). Also, make sure you don’t make it sound like you’ve experience in everything. Be specific. Be relevant to what boards are looking for. This is not about making generic statements like “I am an energetic, global, passionate leader …..”
Finding your 1st or next board seat
You have to be proactive about it. Jennifer Tejada, tech CEO, investor and seasoned board director recommends making a list of 20 companies that you admire and to which you think you can be uniquely useful. “You then, she says, need to start a focused effort to network with the members of those boards and to build relationships with the investors in those companies as well as with other investors who invest in similar kind of companies.”
The aim is to ensure that they think of you as and when an independent board seat opens up.
In fact, Jennifer suggested even mentioning it, as appropriate, when you are meeting customers, vendors etc . You really want to try and fit it into as many conversations as possible, so relevant people everywhere are thinking of you when they hear about a search for a board seat.
Any person who is already a board director will give you the above advise: network, network, network. You should expect for it to take up to 2 years to get your first seat. There are a limited number of seats for independent directors and each board is looking for very specific things. On top of that, the actual interview process can take up to 6 months or longer. So if you are serious about this, you need to be willing to commit to “working it” for a long time before you might see any fruits of your “networking” labor.
Though networking is key, there are also some useful platforms that can aide your search and we have listed those in the resources at the end of this post.
Interviewing for a board position
Remember that you are not interviewing to go and run the company. So this interview is not about convincing them that you are a good operator. Instead, they will want to really get to know you – your character, your values, your experience and your motivations. All this is to enable them to assess if you would add a valuable new perspective to the board and whether you would be a good additional member to assist in the proper governance & oversight of the company in question.
Importantly, remember also that being a board director is NEVER about trying to impress anyone. It really is NOT about you. As Dianne Greene, the founder of VMware and a seasoned board director said, the best board interview question she was ever asked is, “Do you have enough self-confidence to not talk?”
Secure the support of your own boss
Joining the board of another company will require you to divert time & effort away from your full time job. It is therefore important to secure the support of your boss or company board when you take on a board seat elsewhere. Help them see what you will gain from the experience and how this will improve your performance in your full time role at their company. For example, TaskRabbit’s CEO Stacy Brown-Philpot spoke extensively to the TaskRabbit board before joining the HP board as a director.
- Matt Levy at Andreessen Horowitz manages a16z’s board and mentor talent network as part of the executive talent team. Here is a link to a great SoundCloud interview with him and TaskRabbit’s Stacy Brown-Philpot, who now serves on the HP Inc board about getting that first board seat.https://a16z.com/2015/08/13/first-board-process/
In fact Andreesen has put out a whole series of podcasts about what it means to serve on boards , etc. Here is the link to the series: https://a16z.com/tag/board-matters-series/
- https://theboardlist.com/– theBoardlist is a curated talent marketplace for business leaders to recommend, discover and connect highly qualified women across industries with great, tech board opportunities at scale.
- http://broadrooms.com/– Broadrooms is a site created by Gerry Elliott to be an informational resource for executive women who serve or want to serve on corporate boards.
- http://athenaalliance.org/– The Athena Alliance, a non-profit founded by Coco Brown to create key connections that promote qualified women to board of director opportunities and help them excel as they serve in that role.
- Stanford Directors’ College –http://conferences.law.stanford.edu/directorscollege2016/about/– executive education program for directors and senior executives of publicly traded firms. The program addresses a broad range of problems that confront modern boards, including the board’s role in setting business strategy, CEO succession, techniques for controlling legal liability, challenges posed by activist investors, boardroom dynamics, and contemporary issues including the state of the macroeconomy, emerging cybersecurity threats, and disruption.