Whilst any board appointment will incur some risks, for most, the rewards of taking on a board directorship far outweigh these risks. Over the last 15 years, I have helped thousands of people find roles, and it is my conclusion that there are at least 7 rewards to holding a board role.
If you haven’t considered a NED appointment, you should
A recent study from Harvard Business Review found that serving on a board increases an executives likelihood of being promoted by 44% and even if they weren’t promoted their annual pay increased by 13%. Further studies have shown that those who hold a NED appointment in addition to an executive role: have greater job security and are unemployed less. Sitting on a board can also help future proof your career, prepare for retirement, redundancy or a career change. Board appointments also help you work more effectively with your own board and facilitate new connections – leverageable for both business development and pleasure.
7 rewards to holding a board role
If you have been a Non-Executive Director (NED) before then you probably already recognise some of them.
- Career Development: Sitting on a board gives you an insight into the dynamics of board decision making and relationships. Understanding how your own board works. Every board is different but as an executive, it is critical to understand where the levers are that will influence the decision making of your board.
- Strategic Experience: As a past recruiter, one of the questions I asked aspiring executives is to evidence their strategic experience. The keyword here is evidence. Many find this difficult to do. However, those who sit on boards have a ready-made response to this question that articulates their ability to work strategically and their ability to work with senior individuals. Those without board experience can struggle to evidence their ability to work at this level and suffer in comparison to those that do.
- Relationships: Personal and professional. There are two great ways to develop relationships. Playing team sports and sitting on boards. There may be others but in both these cases, a group of disparate individuals come together to try to achieve a common outcome. I firmly believe that there are few better ways to get to know people than sitting around a board table, discussing issues that everyone is passionate about. These relationships formed around a board table can often turn into new business. Indeed, as an unpaid NED and past consultant, I have always earned some income through the relationships formed at board level. It is not the reason you should seek a board appointment but it is a nice byproduct.
- Giving Back: One of the things I hear most from people when I ask them why they want to join a board is the phrase “I want to give back”. Each time I hear it, it sounds clichéd, but it is an accurate statement that many people on boards instinctively understand.
- Remuneration: You can get paid. I have written before about exactly how much you can expect to be remunerated sitting on a board but for many, if paid, this is a nice way to add to your income or see you through retirement. It should be noted here that even unremunerated/voluntary board roles can have financial benefits. I have never been paid for my board work, but I have always received some sort of financial reward through the relationships and experience I have gained as a non-executive director.
- Professional Transitions: Many people seek board experience as a fallback or preparation for post-executive life. Having been through the GFC in the UK as a recruiter (not much use for them in a GFC) I can put my hand on my heart and tell you that it was because of my board experience that I was never unemployed in that period. In fact, my salary and professional experience increased!
- Your Brand & Profile: Just 5% of the population hold board appointments. So, whilst no one should accept a board appointment on the basis alone that it will increase your profile it is, a handy by-product. Indeed, the title of being a ‘NED’ can open up doors otherwise locked. It can give you access to those who you would not usually have the opportunity to speak with – increasing your personal brand and otherwise inaccessible opportunities.
In summary, there are tremendous reasons for pursuing a board appointment. Board appointments demonstrate strategic success, they suggest you can work at the most senior level and have a perspective beyond which you might gain in an executive role. Studies have shown that people who have board directorships in addition to an executive role are: more appointable, earn more, are unemployed less and have better networks and connections that they can leverage personally and professionally. They are also able to future-proof their careers better, have more ‘successful’ retirements and are able to more strongly weather unexpected career changes.
So in my mind, the question is not ‘Is a board appointment worth the risk?’ but rather ‘How do I find board opportunities that are right for me?’ This is something that Board Direction can help you solve. We will show you a simple, easy to implement, process to get you appointed.
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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