In my previous article, I spoke about the five core criteria that Chairs look for in the ‘perfect’ board candidate. They were 1. Prior governance experience – having sat on or worked with boards before 2. An executive skill set that is valuable at board level. 3. Networks and relationships that can be utilised by the board and organisation 4. Demonstrable Passion and 5. A cultural fit. Together these total your board pitch – the reason you should be appointed to a board – and articulate your value at board level.
Beyond these five core criteria, there are an additional three desirable criteria that will influence a Chair’s decision to appoint you. It is therefore important to understand what they are and how to leverage them in your favour.
The three Desirable Criteria Chairs look for in a Board Candidate are:
- (Relevant) Industry experience
- Diversity – not just gender and
- Governance Training
Let’s address each of them in turn.
1. Relevant Industry Experience
While many think that having deep industry experience equates to a board appointment of an organisation in that industry, but this is not always the case. Certainly having a good understanding of the industry indicates appropriate networks, a strong cultural fit and passion (3, 4 and 5 of the core criteria). However, having deep industry experience is not the same thing and is often not as valuable to a board. Let me explain.
When looking critically at the makeup of boards, you will often find in many cases that, while Chairs do value the insight that comes from industry practitioners, they equally value the perspective that comes from people outside the sector. Further, and more importantly, Chairs are mindful that when appointing industry insiders that their skills and experience will replicate the experience of the CEO or executive team. They might also be equally concerned that as a recent CEO/Executive, the new appointment might not understand or be able to separate their role on the board from the role of an executive. So, despite the seemingly obvious benefits of appointing this kind of board member, in my experience, selecting people with in-depth industry knowledge is not the highest priority for a Chair.
If this is you, when playing the industry experience card, it is of utmost importance that you know how your experience differs from that of the CEO or Executive and as such is valuable in a board scenario. Here you should reference the elements of your experience that differ from that of the executive team and CEO. Specifically, you might 1. reference your brand and gravitas within the industry – and the positive impact your appointment will bring 2. highlight how your specific industry connections will provide a return on investment for the organisations. 3. articulate how your particular knowledge of the industry allows you to critique the executive’s decisions and strategies or 4. show how your experience will enable the board to make better strategic decisions not immediately apparent to outsiders.
So, while having deep industry experience in many ways seems the most obvious of the criteria a Chair would want from a new board member, it often isn’t. You need to think carefully about what value you bring above and beyond that which the organisation already has in it’s executive team.
2. Diversity – Not Just Gender
Board Diversity has been proven to increase the performance of boards and the organisations they represent. In essence, diversity is one of the main desirable criteria mentioned in many board vacancy advertisements. As such, it’s one of those phrases that occupies the minds of Chairs but often stalls around what it means; the risks involved or just, gender balance.
Men at this point often get worried about being male and wanting to get appointed. Yes, there is currently a strong push for increasing the number of women on boards. It is not a closed shop for male applicants. A recent study found that 54% of all board appointments were male and 46% female (the results do differ across different industries, sectors and scale of organisations) so the split is fairly even between males and females.
While there is currently a strong push for gender diversity on boards, no woman I have met wants to be appointed based on their gender alone. And, in many ways it doesn’t matter because women wanting a board appointment will be competing against other women who also want the same appointment – so gender, in this case, won’t be a differentiator. As such, we need to be less concerned with gender and give more consideration to what our point of difference is and why it might be valuable to a board.
Gender is just one of the six strands of diversity – and one more that is peculiar to board appointments – that exist. The six strands of diversity include:
The point here is that diversity is broader than just gender. Regardless of your gender, you bring some diversity to a board appointment conversation. It may take some thinking, but when thinking about what drives Chairs to make an appointment, you need to be able to articulate how your ‘diversity’ can bring value to the board.
What I am trying to get at here is that you are diverse – perhaps not in a traditional sense, but you bring diverse opinions and approaches based on your history or experience or in any of the other six strands. As such, with diverse boards being proven to deliver better outcomes for organisations, you have the opportunity to frame any diversity you bring as a good thing and something that is of value to the board.
3. Governance Training
Conservatively, only 20% of all boards I speak to request on some governance training. Those who will often accept your willingness to undertake it if appointed. As such, candidates are rarely excluded because they lack governance training. Equally, others think that governance training will result in a board appointment. That somehow being qualified to be a Director means that will be appointed as one. It does not.
However, having some governance training does influence a Chair in the appointment process, so it is something to consider. I speak to thousands of NEDs and aspiring NEDs each year and roughly 70% of them have some governance qualification. That does not make them all great appointments but with board appointments being such a competitive process, governance qualifications might be the thing that gets you past the gatekeepers and into an interview or an appointment. As such, you should consider getting a governance qualification. There are many reasons to do so:
- It is a ‘club’ that you need to be a part of if you are serious about developing a board career and contributing effectively to the governance of an organisation.
- Adding governance training to your CV will demonstrate your commitment to Board work.
- It doesn’t matter how long you have served on Boards; governance training is likely to teach you things you don’t already know.
- Even if you already have previous non-executive experience, governance training will likely serve to confirm (and formalise) the things you already know – if not refresh your memory!
- Like an MBA, governance training alone won’t get you the gig. However, it might just be the difference between being appointed or receiving that apologetic email or phone call – after all, when all things are equal, a board is more likely to appoint a professionally qualified candidate than someone who is not qualified.
- The cohort you complete the course with will be your peers and may provide a strong network for you. As I have said before, the value of a strong network cannot be over-emphasised in your search for a Board role.
- Governance Training will form part of your pitch to a board as to why they should appoint you. It is certain to help you dare them not to appoint you.
In Australia, there are only really two organisations that offer qualifications that are valued by boards and that I would recommend – the AICD and the Governance Institute of Australia. The latter is my pick (in particular the Graduate Diploma of Applied Corporate Governance as it also includes a Company Secretary qualification – another reason for you to be appointed to a board).
In a competitive appointment environment (and it is very competitive!) and when Chairs are only wanting to appoint the perfect board member, having a governance qualification is becoming more and more a must-have for board candidates.
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About the Author
David Schwarz is CEO & Founder of Board Direction – Australia’s leading board advertising and non-executive career support firm. He has over a decade of experience of putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world
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