Becoming a Non Executive Director
I meet many senior candidates who are at the cross roads of their career and unsure of what to pursue as a next step. Some are interested in taking on a bigger role (while they are already at CEO/GM level) whilst spending more time with their family. When you are 50+ years old, at the height of your career and still in great mental and physical shape, it is very difficult to step down.
There is no need as there are other options available and I have had some interesting discussions as well as examples of where we were able to help a CEO take on an even more challenging role but find that work life balance. That step is a board directorship.
Many organizations are seeking greater diversity among directors and are considering a broader pool of candidates. I would like to shed some light on what board work entails and the steps involved in getting a suitable non-executive directorship for the first time. Whether you are looking to broaden your career or looking to retire but build a portfolio life, this will hopefully inspire you to take action.
The aim of a board is to balance the interests of company, shareholders and other stakeholders, ensuring long term growth that is sustainable and profitable. The board supervises the management; it discusses, approves and rejects proposed strategy as well as understanding the financial and operational risk faced by the company within its specific sector. The board is also responsible for CEO succession planning.
The expectations of non-exec directors have grown in recent years due to economic uncertainty, business complexity, regulatory changes, increased governance, increased transparency, investor relations and media scrutiny. Boards are getting smaller and therefore the need for non-executive directors increases, requiring non-executive directors to be more engaged than before.
Many successful executives view serving on a board of a listed company as a logical step in their career. You get more exposure to different leadership styles and corporate cultures, it is a chance to see issues from a board level. Money however should never be the main reason behind the decision to become a non-executive director. It is an intellectual challenge, an opportunity to put your expertise to use and to extend your network. Giving back to corporate life as some would say.
The non-executive director needs openness, a desire to learn, improve, be diplomatic and able to integrate into an existing team. Someone who is tenacious enough to ask tough questions, push and pursue what is best for shareholders and the company. They need to be supportive, intelligent, interesting, well-rounded, mature, funny, entrepreneurial, steady, objective yet passionate, independent, courageous and more. They also need to have a financial background and real business experience, a strong moral compass and to be first class all-rounders with specific industry skills.
Before you take that step and signal your intention for such a role, think about what you could offer? What knowledge, skills and experience have you acquired that might be of value? What kind of company would benefit most from having you as a board member? Know your strengths and weaknesses, be honest about yourself and find the best fit.
Non-executive director searches are becoming more competitive and generally take up to 6 months to complete. Your first directorship is the most important and defining one, it will be the hardest and longest search and others will follow more easily. Aim high, but be realistic, think through any potential conflict of interest and be prepared for rejection.