If you're a senior executive or CEO, there's a good chance you've thought about serving on a company board. After all, board membership is a great way to gain exposure to new ideas and network with other business leaders. But what does it take to become a board member? In this blog post, you’ll discover what exactly a board is and what it does for an organization. We will outline the steps you need to take to become a board member and discuss the benefits of being on a company's board. Finally, we will provide some tips on how to make the most of your experience as a board member.
What is a Board & What does a Board Member do?
The most important duty of a board is to be a governing body that tracks all company matters, such as hiring and firing executives, maintaining company resources, and overall law abidance (investopedia.com). These executive committees have the responsibility to set a company mission statement and vision, hold regular board meetings and make decisions on company policies (indeed.com). Many argue that the most important strategy for a board to adopt is a policy for addressing conflicts of interest. The board forms the top layer of a company hierarchy and must focus on achieving organizational goals.
A board of directors is required for every public company by law. While a board is not necessary for private or non-profit organizations, many still install one. Board members must be elected, and executive search firms typically recruit prospective members (corpgov.law.harvard.edu). Although, the election process varies from company to company. Most boards are made up of senior managers and executives from other organizations, academics, and some professional directors who sit on multiple boards.
How to Become a Corporate Board Member: What You Should Do
Build your network. Having a strong network can help get you far in the executive leadership realm. 92% of board seats are filled through networking (hubspot.com). Many current board members have obtained their roles through their ongoing connections. Some effective ways to network are to proactively attend industry conferences, professional organizations/associations, and of course, networking events. For many boards, prospective candidates are chosen by current members. By connecting and building relationships with people who are already on a board, you can increase your chances of getting a seat. Find out more tips on how to network virtually by watching this webinar.
Promote yourself. Assuming you are already an executive, you have worked hard to build up your resume and gain the expertise you have today. While it is essential to have experience and proven results, you still need to speak up about your accomplishments and contributions. Increase your visibility as much as possible by showing how you added value to companies in the past. Some ways to increase your visibility and build a personal brand are publishing articles and speaking at conferences. More recently, professionals are succeeding by creating a personal brand on LinkedIn. Click here to learn more about how to build a personal brand.
Develop and focus on a specialty. The digital transformation has taken a lot of organizations by storm. More companies are looking for people to join their boards with experience in emerging markets such as cyber security (hubspot.com). Developing your expertise in one of these up-and-coming technologies, like artificial intelligence, can set you apart in the candidate pool.
Address your board search like a job search. Before jumping in on the first opportunity you see, limit your options to find the right opportunity for you. Ask yourself, what industries or companies would benefit most from your strengths and skills? Also, consider what type of company appeals to you, is it a non-profit, in a private sector, or publicly traded? Additionally, think about what kind of culture or dynamics would keep you passionate and interested (forbes.com). Being a board member will require a reasonable amount of time. Ensure that your opportunity will not feel like an obligation.
The Benefits of Board Service
Let’s talk about money. There are financial benefits to joining a board, but it varies on the company. Most members of non-profit boards are volunteers and do not receive any compensation (boardsource.org). However, the experience of being a board member can provide more professional value than it could financially. A good amount of the monetary benefits isn’t exactly direct but can be just as rewarding. For example, if you are employed on top of your board service, you will be seen as more capable. This can lead to more promotions to better-paid positions within your industry. If you have your own business along with board service, you’ll gain a larger network that can ultimately get your business new leads.
Of course, joining a board also allows for a multitude of networking possibilities. You can develop relationships with colleagues that can drastically increase your professional reach and could unexpectedly pay off in the future. Many of the other board members will have strong networks, skills, and experience that may be beneficial to you outside of the board meetings.
Being on a board means that you will be working with directors who all have different professional backgrounds. A diverse board could include a lawyer, an engineer, a website designer, and an editor all on the same team, a variety of combinations is possible. Having this diversity can be a great opportunity for you to build on your current skillset while also learning about other trades (bizjournals.com).
Lastly, having a seat on an executive board can strengthen your professional credibility. A board seat shows that an organization is trusting you with an essential, high-impact, and visible role. Being selected for board membership is like a public endorsement of your value and expertise. A boost to your credibility and reputation is something you get out of board service whether you get paid for it or not. If you’re not getting paid, it shows that you’re willing to donate your time to give back and make an impact. As for paid positions, you can be seen as someone who’s credible and is doing quality work to be recruited for a paid board position.
Getting the Most Out of Your Board Service
The outlook of joining a board is enticing, but to reap the benefits, you can’t take your position for granted. 19% of firms in the Russell 3000 index have appointed at least one first-time director (kornferry.com). With many first-time directors added every year, there's a difference between sitting in a boardroom and being an excellent director.
Let’s discuss some things you can do to make the most of your experience and become a great addition to the board.
Be prepared. The first and foremost task is to always be prepared. Usually, companies provide a package of materials for directors before every meeting, called a board book. The board book typically contains financial statements, company strategy, and other important issues concerning the organization (hbr.org). While this may be obvious, being prepared for a board meeting is essential and it’s clear when someone isn’t. According to a 2017 survey by the National Index of Nonprofit Board Practices, more than one-quarter of executives and 18% of board chairs say that directors are unprepared for board meetings. In addition to reviewing the board book, seek out guidance from other experts and professionals to get up to speed on a company’s situation.
Ask open-ended questions. Asking questions can always be beneficial for gaining more clarity and knowledge until it’s not. Board professionals say that the tone of the question is just as important as the content of the question itself. Too often, directors will ask questions with the intent to make themselves look good. Instead of this, ask open-ended questions to give executives and directors a chance to exchange ideas (exed.hbs.edu). Productive and effective board directors know when their speech will be a contribution, a distraction, or a chance to learn something.
Execute. As a board member, you must continually ask yourself, how can you help successfully assure the performance of the board, the executives, and the organization as a whole? From the start of your role, have a full understanding of what you signed up to do. Board service requires a time commitment, such as meetings, committee duties, and preparation that will soon take over. A great board member doesn’t wait around passively for a problem to arise. They are actively on the watch for early signs of trouble or possible opportunities. Continue to be energetic and motivated in your role to push the organization forward. By staying up to date on learning new information, offering a listening ear, and genuine advice, you can become irreplaceable in improving the organization and its objectives.
Are You Ready for the Board?
Becoming a board member can be a great way to expand your professional network and gain exposure to new ideas. Having a corporate board seat is a unique opportunity where members to highlight their professional expertise while also gaining more knowledge and perspective about the profession.
If you are interested in becoming a board member, we suggest making it your duty to network with other business leaders and attend industry events. Additionally, we recommend that you develop leadership skills and become familiar with corporate governance principles. By following these tips, you will be well on your way to joining the ranks of company directors.