WORKWISE: Navigating channels to a board position
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| Mildred Culp |
But that has changed, says Madeleine Condit, senior client partner at the Chicago office of Korn/Ferry International, a $520 million executive search firm.
"Annually we ask CEOs to send names of those individuals, gender-blind, ready to sit on corporate boards for companies of all sizes, public and private," Condit explains.They more than cooperate, she indicates, confirming their recommendations first with their own boards of directors.
What has caused this seismic attitudinal shift? Board service is becoming a professional development opportunity for employees.
"CEOs ask themselves, 'What can this person bring back?'" Condit says.
She has spent 21 years in board searches and emphasizes finding women and minority talent.
COMPENSATION
Before making yourself available for a board position, you should know how first-time directors are compensated. Dolmat Connell & Partners Inc., an executive and board compensation firm headquartered in Waltham, Mass., recently surveyed 500 companies with revenue less than $1.5 billion.
Managing consultant Eric Bueckler reports, "Board compensation is becoming more complex because of the increased time requirements, thanks to Sarbanes-Oxley. The trend in board pay is away from providing meeting fees and toward a retainer-only approach, because board members are doing more and more work outside of meetings."
Bueckler says the $1,000 per meeting fee considered standard represents a range of $500 to $2,000, depending upon industry and company size. Retainers in smaller companies may reach $10,000 and, in larger companies, $75,000 to $100,000. Dolmat Connell's research finds board retainer values up 25 percent compared to the last two years to a median of $25,000.
"By industry, approximately 50 percent to 75 percent of the time there is a larger equity grant for first-year directors," Bueckler says. "The typical premium is 50 percent to 100 percent more than the other directors."
CHARACTER AND STYLE
Does board service still look attractive? If your CEO doesn't hear from search firms, what can you do?
Stuart Levine, chairman and CEO of New York City's Stuart Levine & Associates LLC, an international consulting and leadership development company focusing upon succession planning, serves on the boards of the $1.3 billion Gentiva Health Services Inc. and D'Addario & Co. Inc., a 100-year-old music supply company. He advises that you first look within.
"Character and integrity count today, as does your ability to learn and think clearly," Levine says. "Do you have the capacity to bring unique perspective based on practical experience?"
Your next step is to "be a hunter rather than a gatherer," states Los Angeles' Edward Savage. A generalist in executive search, he is managing director of the Southern California Regional Operating Center of the $60 million global Stanton Chase International and has been recruiting for boards of large and small companies for 30 years.
"Aggressively go out and promote yourself based upon your domain (industry or sector) knowledge or functional knowledge," he advises. "Build a strategy from there."
FANNING OUT
So, the raw product is in place. You have the right stuff, both personally and professionally. You may not have to market.
Some invitations evolve naturally. Levine, for example, was active in hospital and community boards before two public companies, the $5 billion Olsten Corp. and EAB Bank ($17 billion in assets), invited him onto their boards. Gentiva and D'Addario followed.
Korn/Ferry's Condit comments, "Resources have expanded exponentially. Technologically, we can track people from abroad based on expensive databases."
Search, however, hasn't become exclusively digital. Both Condit and Stanton Chase's Savage point to a number of groups that funnel candidates to executive search firms. These offer a potential solution for people lacking visibility.
One of her resources is Women Executive Leadership (WEL) in Fort Lauderdale, Fla., a non-profit which has a mission of increasing the number of women on corporate boards. Condit says that similar (though less sophisticated), regionally focused organizations exist around the country.
"People interested in corporate boards send their resumes to WEL and it enriches their database," Condit says. "Search firms are saying, 'Let us know who is interested and let's exchange resources.'"
Savage points to volunteer boards, which can be helpful to neophytes, who may step from them "to a private company, followed by a small middle-market company. Ninety percent of private or family-owned boards identify board members through networking with friends and service providers such as law and CPA firms, insurance service providers and other business affinity groups."
Like Condit, he commends university alumni activities.
Another alternative Savage mentions is to combine industry knowledge and operational or P&L experience with "angel" investing ($250,000). He's aware of people who have become board directors this way.
Mildred Culp comments upon the workplace in national media. Look for more of her helpful information at www.workwise.net. Copyright 2007 Passage Media.
