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.

Waiting for the phone to ring........

CEOs and other c-suite executives who announce their departure from their companies “to pursue a board portfolio” often believe that they will be overwhelmed with invitations to join boards. For most, it comes as quite a shock that offers aren’t made with the volume and speed that they expected or from the type organisations they believe to be an appropriate match to their skills and experience.

A senior company executive’s life is busy and demanding. In order for the executive to be efficient and productive, an executive assistant (EA) manages the diary, books flights, makes restaurant reservations and ensures a car and driver is ready. The phone never stops ringing; people are always waiting to be seen.

The EA is a lifeline, a diary at the end of the phone. I've seen CEOs and other well known executives walking down Collins Street in Melbourne or George Street in Sydney on the phone to their EA asking: "Where do I have to be next?"

Outside this environment, the former CEOs often find they are fending for themselves. Some lease an office and employ a part-time assistant; others share office space and secretarial support with like-minded people. “Of course, I look after myself these days,” is the clarion call of a former executive in transition to life as a company director.

For the most part, the executive must adjust to a new life of being self-sufficient: booking their own flights, catching taxis, typing their own emails, making follow up calls. Some former executives even confide to me that they’re worried they’ll have to return their membership card to the Qantas Chairman’s Lounge.

As Helen Coonan, a former senator and now non-executive director of casino operator Crown Limited, told The Weekend Australian newspaper: "Things like (having to drive) yourself everywhere. It's a big shock."

But the least understood challenge for most former executives - or former politicians - who are “building a board portfolio” is the wait: the wait for the invitations; the wait for calls to be returned; the wait between appointments. “You have to be patient and resilient because it never happens as quickly as you expected or wanted,” one ASX 200 director told me.

The yardstick is a minimum of two years – of networking and endless coffee meetings in hotel cafes, of waiting for invitations, of being interviewed by board nominations committees, of learning to cope with not being chosen and of dealing with the disappointment and frustration that can follow.

No longer the centre of attention the former executive can find himself outside of the sphere of influence, increasingly isolated and seemingly marginalised.

Making the transition from an executive career to a company director is a tough adjustment to make. My next post on this topic will offer suggestions and ideas for how a serving CEO can start planning for post-executive board career, and how those “directors-in-waiting” can make the transition easier.