Earlier this year I had the privilege of speaking at a workshop put on by Arizona State University titled “Boardroom Basics.” This was a great opportunity for me to further my understanding and share information about the Board recruitment process. The response to the workshop was good and I am excited to be participating in another “Boardroom Basics” workshop this fall.
In the Executive Recruitment business our team has worked with many Boards on leadership placements. Some Board of Directors work well together with a wonderful and broad set of skills; you can tell they have a strong belief in bringing great stability and strategic leadership to the organization and well… in other Boards not so much. So if you are looking for a new Board member, you want to make sure you are finding the very best Board member based on your unique needs.
As you may know, there is a lot of competition for strong active Board members in the non-profit sector, people give of their own time and typically provide their financial support to the cause. Often there is minimum requested or required contribution to be on a Board member, so there needs to be a strong passion for the mission as well as good Board leadership skills. According to Grantspace there are 1.5 million registered nonprofit organizations in the US. Non-profit Boards are typically larger than for profit Boards, so it can take a lot of recruitment effort to fills these positions.
According to Compile.com – they have pulled detailed information from the government/census and IRS public information and they tell us there are over 9,000 companies with more than 500 employees. If you look at revenues, there are about 21,000 employers with revenues of $50M or more, so there are lots of Board member needs and possibilities out there.
Typically there are plenty of professionals who want to be on for-profit Boards because they are usually financially compensated; however, you still need to make sure you find the right leaders at your Board table, not just professional friends of someone else.
It is a known fact that traditionally Boards have been comprised of white males; many Board members are or have been CEOs or C-suite leaders often serving on multiple Boards. Today there is a trend for greater diversity in both skills/experience as well as demographic diversity. While this is starting to change it continues to be a transition. More women and people of different ethnic backgrounds are being recruited to Boards. This is an important change that is very advantageous to the success of the Board and the company/organization. Based on several studies that have been done, 70%-80% of consumer buying decisions are made by the female adult(s) in the household. It is also true that most healthcare decisions about doctors, hospitals, products and services are made by the female(s) in the household. Ethnic diversity is also important as they bring a different prospective verses when a Board is very homogeneous. This type of diversity can bring creative new ideas and impressive marketplace disruption with new products or services, which are advantageous to the company and consumers. It is not only important to keep an open mind on recruitment of potential Board Members, but think outside the box and intentionally focus on broadening your Board make up from various prospectives.
Here are 5 things you should consider/do before you ever start your Board recruitment efforts. This is important prep work.
Understand the Steps in the Process – You want to have a good grasp of everything involved in finding the best unique Board Member for your organization/company. Then you want to consider the best approach to moving forward. Who will be doing the detailed lifting to get everything done? Depending on the size of your organization, might it be you? Or maybe someone working closely with you, such as your human resources leader, your executive office manager, your Chief of Staff, your nominating committee or maybe you will choose an outside source to partner with you. This is something you want to decide, but before doing so let’s continue with the key steps to get you thinking about the recruitment process to aid in a successful outcome.
Review Your Strategic Plan – Look at your goals 2-3 years out. What kind of talent are you looking for? What skills will help strengthen the Board? In what direction is your company going? This will really help you assess what you will need from your Board of Directors. Not only think about this, but map what expertise you will need from your Board.
Assessment of Current Board Members – There are numerous tools available, many free online – that you can modify/tailor to the skills, experience and demographics information you want to use in your assessment. I suggest you research “board skills matrix template” and you will see lots of possibilities or you can create your own. The goal of this assessment is to confirm the strengths and value each of your Board members bring to the table. This review can be done much like a 360 review for employees. It can be beneficial if they rate themselves, rate each other and they can be rated by a few of the senior leaders, i.e., CEO/President/COO/ CFO, those who interact with your Board members on a regular basis. This can certainly be intimidating even for Board members, but this can be done in a confidential way or sometimes if everyone is okay with sharing their rating sheets with everyone else, which is a possibility too.
Look at the Gaps – Once this process has been completed – you might think you know where the gaps are and you may be exactly right or there might be some surprises. This can then really help you with what skills and experience are needed. While you need to have the certain skills and experience, again you should also look at the make-up of your Board from a diversity and gender prospective. Below are links to two articles that talk more about the success and results of organizations who have created more ethnic diversity and gender balanced Boards.
Create a Profile – Now you are ready to spell out exactly what you are looking for in your next Board member; this is high level but hits on the unique qualities that you need in this member. This is an internal document, with a focus on those needs, verses a position description that is intended to be shared externally and typically gives a lot more information about the organization, key expectations/requirements, experience, etc. From here a position description similar to an employee role can be created.
This completes the preparation phase, so now the next phase is the outreach, search, interview, assessment and decision making steps. Being prepared will go a long way to getting into the next phase of the Board recruitment process. That is a topic for another day. What steps do you take in the Board recruitment process?
Lu Miller is a Principal & SVP of Business Development at Morgan Consulting Resources, a healthcare executive search firm celebrating over 20 successful years in business.