The transition from an executive to non-executive director is difficult – 5 steps to make it easier

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In my years as a Non-Executive Director recruiter and Non-Executive career consultant, I have had countless conversations with CEO’s, CFO’s, COO’s and Senior Executive looking for their first independent Non-Executive role. They often see transitioning from an Executive to a Non-Executive Director in Australia as almost impossible.

The conversations I have with each candidate are usually quite different, but inevitably, for most, the truth is: 

“Yes, the transition from an executive to a non-executive director is highly competitive and difficult. However, I strongly believe there is board role out there for everyone. By following a proven structure and starting with these 5 steps you can get your first board role.”

What is an executive vs a non-executive director in Australia

Before committing to this transition, you first need to be clear about the roles of an executive director vs a non-executive, or independent director.

Executive directors are full-time employees of the company and are part of managing the daily duties of the company. The value of executive directors to a board is their depth of knowledge of the business and their technical skills.

According to the AICD, A non-executive director, by definition, is any director who is not an executive of the company. They are sometimes referred to as “outside directors” or as a “NED”. Since Non-Executive Directors (NEDs) aren’t employees they bring objectivity and independence to act in the best interests of the organisation. When it comes to their board roles, nearly all the director duties for executive directors and non-executive directors are identical. Fiduciary duties are the most important duties for both types of directors. 

Along with these duties comes responsibility and a level of risk that you need to consider.

Here are 5 steps I recommend executives should action now to gain a non-executive board role

#1 Start early – you can and should do both roles

Studies have shown that those who hold a NED appointment in addition to an executive role: earn more; are more promotable; earn more; have greater job security and; are unemployed less. Board appointments also facilitate the development of new skills and new connections that have countless professional and personal benefits.

Successful Non-Executives Directors start their board appointment careers early. They recognise it takes time to build the experience and networks required to build a portfolio of board appointments. Consider cutting your teeth on a smaller not-for-profit role,  commit to your kid’s P & C or junior sports associations, see what committees or advisory committees you might be able to participate in within your current organisation or industry. Committee roles or board sub-committees count and can be leveraged very effectively.

#2 Carve out time – from your executive career and personal life

 Are you willing to put the time into securing an appointment? If you can answer ‘yes’, then you expect to commit the next 12 months to the process. For many achieve results far quicker than that.

Believe it or not, here is where I see most prospective non-executive directors fail. They let work and life get in the way, They do not commit a full 12 months to the board appointment process. To be successful, you need to stay motivated and organised. Schedule regular time in your diary for the tasks you need to complete.  If you do this weekly you will avoid getting overwhelmed and find yourself off track.

You should also prepare for the time commitment required of a board director once you are appointed. As a general rule, my advice is that a typical NED spends approximately 2 days a month on non-executive duties. Formally, there will be board meeting preparation, external or committee meetings, travel, governance skills commitments and the board meetings themselves. Informally, you may be asked to participate in ad-hoc discussions and provide advice, coffee catch-ups, industry events and promotional events.

#3 Understand intimately what you have to offer a board

You to be clear on the primary skills and or experience you can contribute at the board level. There are many skillsets that transition well from executive to non-executive roles. Most boards have a skills matrix. Researching a number of these may help you identify the skills you have to offer. Once you are clear about what you have to offer, you need to be able to complete this statement “At board level what I do is…” Note I say – At board level – because if you have not held a board appointment before you need to emphasise your board-level experience and value. Be specific and provide details or quantifiable results where possible.

On the flip side, just like with your executive career, you need to identify what skills and experience you may be lacking and action a plan to bridge the gaps. As a board director, you will be forever learning and developing, more often than not, your soft skills. 

#4 Get your board application documents in order

I can not stress enough how important it is that you have Board CV. A Board CV alone will not get you the position board position that you are applying for, but an inadequate Board CV or submitting an executive CV may lose you the opportunity – don’t take the risk. Make sure that you have a CV that reflects your experience and skills at board level.

Every board application you submit should be supported by a Board Cover Letter, regardless of whether it was requested or not. If needed, add it as the first page of your Board CV. These documents must not be rushed, you need to be prepared by having draft documents and/or templates ready.

#5 Tell people you want to transition from an executive to non-executive director

Start telling people that you’re looking for a board appointment. You never know what doors you may open. But expect to be asked “why do you want to be a NED?” or “what sort of board role are you looking for?”. You need to respond with something that will impress and make you memorable. Writing your Board Profile is a good place to start.

To  conclude

Finding and gaining your first non-executive role is a task no one is qualified for. But, keep in mind that it does and has to happen. Everyone transitioning from an executive to a non-executive director has to starts from somewhere. As often is the case, success is linked to the amount of effort you put in. Maintain your focus and persevere. When life gets in the way it will be challenging, so it is critical you have structure and practices in place that support your board aspirations.

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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