Finding a public company board seat can be difficult, to say the least. After all, there are only about 4,381 public companies listed in the US, each with about 7.5 seats held by nonexecutive directors. Combine that with a low rate of turnover for the directors already occupying those seats—about 8.5 years in the S&P 500—and approximately 3,866 public board seats become available each year for independent directors. To put that in context, just 339 new board seats became available in the Fortune 500 in 2014, with 67 percent of those seats filled by current and former CEOs and CFOs.
With the limited number of seats available on public company boards, NACD recently released a memo, called Director FAQ: Finding Your Next Board Seat, detailing five key strategies to help you find your next board seat. We’ve summarized three of those strategies below:
- Evaluate the current demand for board seats and what company type your corporate experience is most suited to.
- Nonprofit Boards: Nonprofit board service—though often uncompensated—is rewarding in its own right and a great way to meet directors who can, in turn, be points of introduction for other board seats.
- Private Company Boards: More than 99 percent of all U.S. companies are privately owned. Serving on the board of a start-up or small private company can be a great place to learn how to be a director, especially with the venture-backed and private equity firms establishing the governance structures at these companies.
- Public Company Boards: Although there are only a few thousand public companies in the U.S., non-U.S. companies that are headquartered and conduct business abroad, but are listed on U.S. exchanges, may be particularly interested in directors who understand U.S. listing requirements and who can help satisfy independence standards.
- Strengthen your personal brand.
Take the following steps to help you develop your personal brand:
- Become a recognized subject-matter expert by speaking at conferences and publishing articles.
- Conduct an Internet search of yourself and analyze the results to determine if there is anything damaging to your reputation and how you will mitigate it.
- Keep your LinkedIn profile current and include a photo of yourself.
- Design your résumé for a directorship position, not an executive position, by describing what you can bring to the boardroom.
- Formulate a comprehensive networking approach.
In the 2015–2016 NACD Public Company Governance Survey, 38 percent of respondents indicated that personal networking or word of mouth were the most valuable methods of identifying their most recently nominated director.
When networking, target a number of individuals:
- Your CEO may have recommendations for where you may serve that would be complementary to your current role.
- Executive assistants you meet at conferences are often able to put you in touch with directors you would otherwise be unable to track down.
- Your working relationships at law firms, consulting firms, and banks may pass along your information to other businesses they work with.
- Shareholder activists need independent directors to place on boards of the companies they target.
- Venture capital and private equity firms look for independent directors to lead their companies toward an IPO.
- Contacts at potential boards can provide advice about the kind of board you would be suitable to serve.
NACD’s Global Board Leaders’ Summit, beginning this weekend in Washington, DC, includes a workshop on Landing Your Next Board Seat this coming Monday, September 19 at 2 p.m. To register for the NACD summit, please visit NACDonline.org/summit.