Having taken briefs from hundreds of Chairs as a past Board Recruiter I have found that, regardless of the scope or scale of the organisation, there are just five core elements that they want to find in a new Non-Executive Director (NED). Today I want to define for you what they are.
In my last article, I wrote about why people who want a board appointment spend too much time articulating why they think that they should be appointed to a board and that they don’t spend enough time considering what the motivations are for the Chair – the ultimate decision-maker.
There are thousands and thousands of boards operating across a wide range of industries in Australia and internationally. Each one operates within its own context and has various peculiarities unique to them as such, it often seems difficult to decipher exactly what they might value in a new board member.
This confusion is often compounded by a board’s desire to have specific and targeted skills which regularly change to match the organisation’s current circumstances and aspirations. All of which means many potential NEDs are confused about what their board pitch should be, how to articulate in a compelling fashion what their value is at board level and why it is more valuable than one of their competitors.
After stripping away the contextual issues, in my experience, there are five core criteria that you must be able to address verbally and in writing in both formal and informal contexts. The combined value of these elements will result in your Board Profile – your pitch – and will answer the question you will be asked by Chairs, recruiters or Nominations Committees ‘Why should we appoint you to this board’. Understanding what these elements are will and how to address them will provide you the framework to answer that question.
Those five core board director criteria are:
1. Prior Governance Experience
‘The best way to demonstrate future success is past success’ – an old adage many adhere to because it rings true. Of course, when you think about it, it is misleading because it doesn’t take into consideration a wide range of personal or professional elements. I have seen clients on numerous occasions make seemingly strong appointments of a ‘successful’ candidate only to see these individuals fail or not live up to expectations. What is the reason for this? Because they thought past success was equal to future success. However, they did not take into consideration the many factors which influenced that success. For example, they may not have considered the differences in the culture of the organisations, the teams supporting them, their family life at the time, the economic environment, etc.
Despite many boards overemphasising the value of past governance experience, it is still something that many appointment processes take the most comfort from. Indeed it is the thing that a Chair often asks for first – someone who has done the role before. I understand this, few want to go through the process of training a new NED and would much prefer to appoint one who will hit the ground running. For this reason, being able to demonstrate some form of governance experience – board or committee experience – is really valuable when applying for a board role.
If you have had governance experience
That is you have held independent board roles before – this should be where your emphasis should be initially. Tell them you have done the job before, make it clear you you have been/are a Non Executive, Committee Member or Board Director. Tell them you have done the job before.
Having been a NED before of course does not mean you are any good at being one. So any statement about your experience must be supported by evidence of your success.
If you do not have board experience.
All is not lost. It does not mean you can’t get a board appointment – everyone starts somewhere. However, you should still try to evidence board level experience. For example if you have held board roles as part of an executive appointment that still counts. If you have held committee roles before that counts too. Also, if you have been reporting into boards then that can be leveraged as well.
Failing all of that you will need to speak of your governance experience. Your understanding of the requirements of a NED and how your current experience demonstrates your ability to contribute to the governance of an organisation.
Many people think this is the most important element. It isn’t always but, more on this topic later.
2. An Executive Skill Set
At board level what do you do? What is your value at board level? And, why is what you do more valuable than one of your competitors with the same skills?
These are the questions you must be able to answer clearly and effectively. Being unclear about this is a killer.
I recently interviewed a potential board member who, whilst well qualified and had relevant experience, could not articulate what their role on the board would be. He could have done the job but because he could not articulate his value he was not appointed. So, be clear about what you have to offer and ensure that you can articulate it.
What skills are valuable?
Finance, audit and risk and legal are the most often requested skills at board level. Whilst the desirability of these skills is decreasing it is still great news for the lawyers and accountants reading this article. However, it is not a slam dunk. You will be competing against other lawyers and accountants for the roles you want so you must be able to articulate why your experience is more valuable than your competitors.
For those of us who aren’t accountants or lawyers, we need to work harder to articulate what our value is at board level.
Write these two sentences down:
At board level what I do is…
The way I do that is by…
You must be able to complete these two statements. By doing so you will be able to convince others not only that you know your value at board level but also that you have given thought to the subject – something many many have not.
You can think about your value in two ways: Firstly, by considering what the ROI would be for an organisation if they were to appoint you to their board – what would you deliver them? Secondly, consider what they would lose by not appointing someone with your skillset to the board – what risks they do open themselves up to and what is the cost of those risks that you and your skillset can mitigate.
3. Personal Connections
Demonstrating how your ‘Personal Connections’ (otherwise known as ‘networks’ which Malcolm Gladwell in his book “The Tipping Point” helpfully reframes) can benefit the board/organisation is key. To do this effectively will mean spending time thinking about who you know (individuals, industry or organisations).
No matter what you call them, the point is that boards want the benefit of your personal connections because the introductions you provide, the brand that you bring, or the knowledge you offer can be leveraged to expedite business growth and lead to new opportunities. These relationships can also smooth difficult situations or provide access to knowledge not otherwise available to the organisation’s executive team.
4. Demonstrable Passion
You must always remember that passion is the key to being able to effectively serve on a board. Current board members are passionate. They are passionate about one of three things. 1. What the organisations do 2. What the organisation is or 3. How they can contribute. You must be able to share these passions – and be able to articulate them. As such, your passion must be demonstrable.
In many cases, this passion can be manufactured. Simply engaging in a real way with the organisation and sector will allow you to do this. However, it will be difficult to do this convincingly if you don’t start that journey early. But, demonstrating your passion for the organisation is essential and not being able to do so can often be the difference between an appointment or not.
5. Cultural Fit
Cultural fit is a difficult one to define. In many ways, it is a catch-all of the four points above. But, it is also more than that. Cultural fit is one of the reasons that people are appointed via personal connections so often. In essence, being a good cultural fit means that you are able to demonstrate that you will work appropriately with the board and as such do not offer a risk to those appointing you. It is a powerful attribute and one many candidates overlook in their preparation for interviews or informal conversations with Chairs.
Essentially, what cultural fit means for a Chair is that you are not going to risk their reputation and that of the organisation they represent if they were to appoint you. So demonstrating cultural fit is primarily about de-risking your appointment.
So, to respond to this element you should be able to articulate your knowledge and engagement of the industry, knowledge of the business, reference people you know in common and, you must reference people you know in common. This might sound like a tall order but it is surprisingly easy to manufacture a strong cultural fit – something we do with our NED Program members.
Ok, lots of content here so, to put all of this into more familiar context the five criteria that boards look for in potential board appointees are not dissimilar from what you might expect in an executive appointment:
- Experience – someone who has done the job successfully before.
- Skills – someone who is qualified and capable of doing the role that is asked of them.
- Connections: Someone who is connected well enough to bring additional value.
- Passion – someone who really wants to see the business grow because they are passionate about what they do.
- Culture – someone who is going to fit into the culture of the team.
There is, of course, no such thing as a perfect board candidate and there are countless reasons why you might not be appointed to a board. However, understanding what the ‘appointment levers’ are means that you can begin to address them and thereby increase your chance of successfully being appointed to a board.
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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