Women have been pushing up against a granite ceiling to gain corporate board seats in the US for decades. I served on my first board, General Re, in 1990, when just 11% of the public corporate board seats were filled by women. It’s disappointing that the number of board seats held by women over the following two decades only progressed to 16% by 2012.
Finally, we are beginning to see some real progress. As reported by Spencer Stuart in their 2014 Board Index, S&P 500 companies filled 371 newly appointed independent directors positions to their boards, and of those 30% were filled by women. This is up from 24% in 2013.
The size of boards also seems to have an impact on the number of women holding board seats. According to a recent Ernst & Young report, the S&P expanded list of 1500 companies reveals that the average number of women on boards in 2014 varied from 10% for companies with 7 board members to 23% for companies with 13 members or more.
Energy and technology companies are on the lower end of the spectrum, while consumer products and services companies rank near the top. The gender of the CEO also matters. For S&P 500 companies with women CEO’s the average percentage of women board members was 30%. This compared favorably with all S&P 500 companies, where women held 19% of all board seats.
As a longstanding corporate board member and one who has recruited many new board members over the past two decades, I would like to share my thoughts on 10 highly effective actions for anyone preparing for their first corporate board appointment. In 2014, industries varied on the average number of women on boards.
10 Actions To Get Board Ready
1. Ask Yourself Why You Want To Be On A Corporate Board
When someone approaches me about wanting to get on a corporate board, the first question I ask is why? Most people say they want to expand their credentials in the business world, some are transitioning out of executive roles and would like to join boards, and some want to learn more about other business sectors. These are all valid reasons, but corporations want to know what you can do for them. I advise people to organize their resume to reflect experiences that boards might find valuable such as financial literacy, international experience, technology know how, regulatory expertise, and social media. These are experiences that are often at the top of board searches today. Learn how to position yourself for board readiness.
2. Consider What You Can Offer The Board, Not What The Board Can Offer You
Everyone searching for their first public board experience should ask themselves, What do I offer? This is what they want to know. Beyond organizing your resume and thinking about the specific skills you bring to the table, familiarize yourself with the industries in which you have an interest and study their board compositions. Board selections are not the same as filling management needs, but in the last decade they have moved from having a team of high profile members to members with specific work experience and expertise.
3. On-Boarding Courses Can Get You Started
Prepare for the role by taking an On-Boarding class for first time board members. There are many weekend and 5-day courses offered by universities and organizations specializing in board preparedness. Here are some of the most widely attended courses for your consideration:
- Business Schools with Corporate Board Training and Seminars
- OnBoard Bootcamp Women Corporate Directors
- Kellogg School of Management, Women’s Director Development Program
4. Online Discussion Groups And Registries
Prepare yourself by taking advantage of many online discussion groups. You don’t need to weigh in on every discussion, but by reading the exchange among members of these discussion groups, you can learn the pros and cons of such subjects. For example, should the chairman and CEO roles be split? What are companies doing about cyber security in the age of breaches? Here are some resources you will want to check out:
5. Board Governance
Learn about board governance responsibilities. Boards have very specific responsibilities and while they may vary somewhat from industry to industry and company to company, you can learn a lot about them by reviewing the requirements as posted by the New York Stock Exchange and the NASDAQ. First and foremost, the Board is responsible for having the right CEO in place and to be stewards of shareholder interests. The board must be comprised largely of independent directors, not members of the management team. Corporate boards require responsibility and dedication to the industry. There are many resources for staying informed. Here are some I can suggest:
6. Committee Responsibilities
Learn the responsibilities for each committee. Committees are the working units of corporate boards, where much of the workload lies and recommendations to the board for actions taken are derived. Each publicly listed company must have an audit, governance and compensation committee and often corporations have more depending on need. Learn what the roles of each of these committee plays and how your skills might match up.
7. Company Annual Reports
Read the annual reports of companies that interest you to educate yourself about the opportunities and challenges of the industries. This exercise will give you a much better idea of what corporate boards are responsible for and whether you believe serving on a board is what is most suitable for you at this time. It is important to know what types of industries you are interested in. Understand that serving on corporate boards is at least a 200 hour per year commitment, and in special circumstances, mergers, acquisitions, bankruptcy and legal action, can evolve into a much greater time commitment.
8. Make Yourself Visible
Begin to work your network of contacts, both online and in-person and let your colleagues know you are interested in serving on a board. Look for ways to generate press coverage and publish articles specific to your areas of expertise. Utilize Linked-in discussion groups, get your voice out there. Be visible.
Board searches are often long term propositions, as boards frequently plan out two to three years in advance to fill board seats. It is important that board members looking to fill board seats, have heard you speak, read your articles, or seen you in the press.
9. Attend Events For Board Members
Source events you can attend to socialize with people serving on boards, with a particular eye on people who are governance committee chairs or members. While anyone on a public board can recommend candidates for the board, it is the members of the governance committee that conduct the original search. Present yourself as a viable candidate by discussing board issues at hand and project a current knowledge of board governance. Here are some organizations that have a board candidate registry. Get yourself registered.
10. The First Board Interview
Once you have been granted an interview, be prepared. Read the annual report of the company, come prepared to ask questions and speak clearly about your own experiences that would qualify you for the board. Research and review the other board members. And ask to meet with them. Are they people you believe to be trustworthy and experienced? Ask to speak to the General Council to determine if there are any pending lawsuits that would give you pause for serving on the board. Ask to meet with the company’s CFO to better understand the business model and economic metrics. Do your own due diligence. Your commitment to serve comes with responsibilities. Be prepared and you will represent yourself well throughout the selection process.