How to Win a Board Seat

Every year, approximately one-third of the 1,750 seats available on ASX200 company boards are made vacant. Most vacancies occur because the directors have completed their terms; three terms of three years is the usual benchmark.

Other vacancies arise when board members retire because they've accepted a new board appointment which is in conflict with some of the boards in their current portfolio. For example, a director would not be able to maintain a seat at a regional bank board if they then accept a directorship at a bigger bank.

Or the vacancy may occur because a director simply has too many boards to manage efficiently and properly.

Past practice has meant that the candidates who fill these vacancies will be similar to their predecessors - male, Anglo-Celtic origin, and similar professional, educational and personal backgrounds. However, more of these seats are going to women as a result of new best practice guidelines which encourage listed boards to reflect a better gender balance in their composition.

That said, there are still only about 550 positions on ASX 200 boards that are made available every year. And each one is hotly contested.

Winning a seat on an ASX200 company board reminds me of the school leaver or newly-minted university graduate who misses out on a job because they don't have any work experience. How can they get work experience when no-one will give them a job, they lament.

It's the same in board circles. The way to get a seat on a listed company board is to have a listed company board in your portfolio already.

In my previous post, "Waiting for the Phone to Ring....", I advise senior executives making the transition from a full-time career to building a new role as a professional company director to be patient, tenacious and diligent.

The traditional routes are to register with organisations that advertise board vacancies. One example is Women on Boards, a not-for-profit organisation which campaigns for gender diversity on boards across all sectors.

It's also useful to meet the key consultants in the board search industry. Most large consulting firms provide such a service; there are also a range of boutique agencies which specialise in board placement. But be careful to choose consultants who are truly experienced in board search to ensure your résumé is handled professionally.

The best way, however, is to use your personal network. If it's appropriate, let it be known that you will be pursuing a board career once you leave your current executive role. Your first board is the most critical when you're starting out as a company director because it signals to the market what type of director you will be and the type of industry you're interested in - financial services, health, mining?

The people in your personal network who will provide the best advice are non-executive directors, CEOs, chairmen, company secretaries and board search consultants. Telling your network that you're available for a board seat once you leave your current job is critical to finding your first board role. These are the people who already familiar with your experience and capabilities and are more likely to champion your next career move.

It's tempting to defer searching for board roles until after you leave your current executive role because your job is too demanding and leaves you too little time to network. But many executives in transition forget the caché that their job title and company often carries - and how quickly this is forgotten once they've left.

It's often more palatable for a chairman to appoint a new director who is the CEO or CFO of a major organisation rather than to hire someone who's been "retired" for six or 12 months as they "build their board portfolio". 

Making yourself out to be a good catch is part of the game in board circles, just as it is with applying for any new role.

The next steps to consider are:

1. writing a director's résumé;
2. preparing for an interview, and;
3. conducting due diligence on your prospective board's company.

I will cover these in subsequent posts.