How can companies best find the kind of diverse board candidates who offer the depth of experiences and skills needed in today's competitive market?
Companies seeking to create boards of directors that reflect the diversity of their stakeholders must look beyond traditional channels for individuals with a different set of skills and perspectives, according to a panel of board search and venture capital executives.
The discussion came during The Independent Director Initiative, a two-day program designed to help individuals from under-represented backgrounds land board directorships in venture-backed private companies.
During the session, panelists warned CEOs not to rely solely on their networks or to strictly target C-suite credentials to staff a board. Company leaders need to reevaluate their criteria and methods for filling board seats and broaden their pool of candidates.
鈥淚t鈥檚 a loss for the companies that can鈥檛 see these candidates, and it鈥檚 a loss for the prospective candidates who don鈥檛 get to bring their expertise into the boardroom,鈥� said Ann Shepherd, co-founder of , an organization aimed at addressing women鈥檚 under-representation on corporate boards. It鈥檚 also a loss, Shepherd noted, for all those stakeholders who are invested in the company.
Search and reach beyond personal networks
Before starting Him for Her, founder Jocelyn Mangan interviewed more than 90 CEOs and sitting directors 鈥� all of them men 鈥� and found that all filled their last board appointment with someone from their personal network. 鈥淚t makes sense if you鈥檙e filling a board seat to go to people you know and trust,鈥� Shepherd explained, cautioning that such an approach often excludes potential talent, especially among people of color.
The key to disrupting this approach is to 鈥渢each boards and teach the people seeking board positions to fish where the fish are,鈥� said panelist Keith Dorsey, an executive recruiter at global search firm Boyden. 鈥淭here is rarely malice behind executives鈥� process for filling board seats 鈥� it鈥檚 just that people don鈥檛 know where to find a pipeline of candidates.鈥�
Members of the panel on board diversity, held during the recent “Independent Director Initiative”
Executive search firms can help bridge the gaps between these networks and the diverse candidates that corporations hope to reach, said Dorsey, warning, however, that search firms also need to consider making changes to how they work with aspiring board members. His research showed that women in particular felt some reticence in dealing with old-line executive search firms, where they sometimes felt unheard.
鈥淭he talent is out there,鈥� said Ozzie Gromada Meza, vice president of member and talent services at the Latino Corporate Directors Association (LCDA). Meza highlighted the work the LCDA has done amplifying the talents of those pescados 鈥� or fish, in Spanish 鈥� in the Latino community. When working with potential board candidates, Meza said it鈥檚 important that the individual鈥檚 mission and values match those of his organization.
Panelist Josh Green, a former venture capitalist and corporate director, said he believes those corporations that are genuinely committed to serving stakeholders are naturally motivated to pursue board diversity. 鈥淭he principles of stakeholder capitalism give guidance to making that happen,鈥� Green said, explaining that in stakeholder capitalism, companies orient their activities to satisfying the needs of shareholders, employees, customers, and the community in which they operate.
Too often, however, organizations mistake diversity goals for embracing representation 鈥� so-called 鈥渂oard washing,鈥� Green noted. And in those situations, diversity candidates must be prepared to ask the hard questions of the interview panel and even step away, if necessary, he added. 鈥淚f you truly see a focus and devotion to stakeholder capitalism principles, then I think it becomes of interest.鈥�
Find your 鈥測ou-sized鈥� hole on a board
Seeking out diversity also means considering candidates with experience and skills outside of the CEO and CFO to other executives in the C-suite, panelists explained. 鈥淲hat we have to do a little bit differently right now is challenge those boards as to why they鈥檙e seeking yet another CEO or CFO,鈥� said Dorsey. 鈥淚f you have nine [board] slots and you currently have eight CEOs or CFOs today, what are you hoping to get from a ninth?鈥�
Companies must look to other executives to find the skills that today鈥檚 rapidly changing business world demands, Shepherd said. She urged board hopefuls to evaluate and highlight their competency in a few key areas 鈥� such as functional and industry expertise, customer and business model experience, and scale 鈥� and then explain their specific value to boards.
Overall, panelists said that board seekers should do their homework and determine which of their favorite companies would be the best fit for their own skill set. 鈥淐lean up your LinkedIn, do your homework, and develop your value proposition by looking at the skills needed on several of your favorite boards,鈥� Meza explained.
Beyond that, candidates should 鈥渒now that you have a story to tell,鈥� he added. Relying too heavily on the resum茅 gives short shrift to human elements that can make certain candidates more relatable. 鈥淗ow you deliver your message is going to be super-key,鈥� he said. 鈥淚t鈥檚 a brand thing that you鈥檙e trying to build, so just be very cognizant of that.鈥�
When it comes to the mechanics of securing a board position and serving as a director, the panelists offered advice on everything from advisory roles to knowing the right time to leave. Fit is important, panelists advised, especially in the areas where boards typically focus 鈥� management, service, and governance.
In the end, 鈥渋t鈥檚 all about serendipity鈥� and finding the board with the you-sized hole in it,鈥� Shepherd observed.
