Topics: Board Composition,Corporate Governance
Topics: Board Composition,Corporate Governance
May 3, 2022
May 3, 2022
It’s an indisputable fact: no two boards are the same. However, there is one thing that they all have in common: the need to bring on fresh talent to meet the demands of the company’s evolving requirements. And sometimes that means adding more than one director simultaneously.
In every case, the board wants not only to find the best and the brightest, but also an individual who will serve as a true strategic asset to the organization, a cultural value-add, and offer the right complement of special skills and attributes to that board room.
The search for a new director can be daunting for any company, regardless of size or industry. Where to begin? Whom to reach out to? Where to find untapped talent that is ready to give their all to your team? Amidst the day-to-day work of board service, it can be challenging for nominating and governance chairs, search committees, or board chairs to separate myth from reality in terms of best-in-class practices for this perennial board responsibility and opportunity.
Here are six of the most common myths about conducting a board search. Understanding these myths—and what the reality is—can help improve the process for finding a new director.
Myth #1: Just because someone has served on a board, they are qualified to serve on your board.
Reality: Needs and requirements for board service are constantly evolving. Companies’ unique culture and needs—particularly given the changing environment or industry in which they operate—must be taken into consideration. Potential board members who may look perfect on paper and interview flawlessly, need to be deeply researched and reference-checked around their expertise, impact, involvement, communication style, and overall ability to work collegially with others in a boardroom setting—and your boardroom in particular.
Myth #2: Search firms provide minimal value and ROI. In today’s digital environment, it’s better—and easier—to execute a search by leveraging a job board or technology platform.
Reality: While not every board will need or want to use a search firm for every search, there is an art and a science to board search that professionals with years of experience and accumulated expertise can bring to bear. A search firm’s extensive relationships and understanding of how to identify and assess talent for boards shortens the process and lightens the load considerably for a board. Search firms can also ensure unbiased processes, which is particularly helpful in cases where candidates have been recommended to the board by internal or external stakeholders. An independent firm stands outside the delicate relationships and ensures that everyone is put through the same process. All told, organizations may achieve better results when they bring in an independent force to help shepherd a search committee or board through a well-managed board search process. Pro-tip: be sure to ask any search firm to bring the board a diverse slate of candidates.
Myth #3: Search firms maintain a “stable” of candidates ready to plug into any board opportunity, making the project easier, and their practice scalable.
Reality: A great search firm knows that every project is unique and leads it as such. It honors the very specific needs of the individual board and invests considerable energy in understanding those needs, the matrices of skills, and even personalities involved. It executes deep research and leverages extensive networks in doing everything necessary and possible to curate a slate of candidates that meet—or more commonly, exceed—those needs.
Myth #4: It’s always safest to go with a large, established executive search firm with a reputed board search practice. Everyone will know that we took a trusted, tried-and-true approach.
Reality: In today’s ecosystem, organizations have a wealth of options at their disposal when it comes to selecting a search firm, with access to a variety of price points and services. Each type of firm has advantages and strengths. Large search firms can tap into a wealth of deep knowledge and expertise. Their networks often span across multiple industries, levels, and geographies, while their large staff can manage multiple searches at once. Smaller, boutique size firms are sometimes led by professionals who formerly excelled at a larger firm and wanted to do business in a fresh way, deliberately maintaining low search loads, affording them time to focus on each client in a customized way.
Myth #5: There are not enough qualified, diverse directors and board-ready executives.
Reality: Boards looking to place a new director have a wide range of experienced, diverse directors or board-ready executives from which to select. A great firm works to get to know these individuals over the course of many years and are always meeting new director candidates. For example, NACD Board Search regularly speaks with candidates from NACD’s membership, the NACD Accelerate program which focuses on board-ready executives, and our partners at organizations focused on board and executive diversity. Highly qualified, diverse candidates are plentiful and in high demand.
Myth #6: Our board is already diverse—we don’t need help searching for candidates.
Reality: If your board currently has a diverse makeup, including individuals with different experiences and backgrounds, you’re already ahead of the game. Boards must mindfully and continuously focus on creating a diverse and balanced board—today and beyond—that reflects both the values and strategic goals of the organization with the right mix of experience and expertise. They should work to identify candidates or work with a search partner who is invested in the positive impact these board members will make on an organization over the long term. With potential increases in board diversity regulation on the horizon, heightened investor attention on the issue, and the proven benefits of having a diverse board, it’s critical to be constantly in succession-planning mode, just as we are for management. New skill sets such as those in digital transformation, cyber security, global business, climate considerations and ESG, among others, must be part of the skills matrix as they represent the evolving customer bases of our organizations, and demands of board service.
Forewarned is forearmed. Being mindful of key myths of board searches can help directors understand the realities and implement best practices for their own next director search.
The identification of these myths was inspired by Susan Paley’s conversation with Kim Shanahan, president and CEO of accelhrate.
Susan Paley is vice president of the NACD chapter network and executive sponsor of NACD Board Search. She is a former television script writer and producer and certified as a leadership coach. Visit our website for information about NACD Board Search.
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