What You Need to Know to Land a Company Board Seat
Read Time: 5 Minutes
Serving on boards is a rewarding and enjoyable experience. Joining a board allows someone to leverage their industry competency, learn governance skills, expand their career portfolio, and help companies in unique ways. But landing a seat in the boardroom is not easy, and not all boards are the same. Board roles differ based on whether the company is publicly traded, privately held, or a nonprofit.
Publicly traded companies have specific rules that are governed by the Securities and Exchange Commission. For example, a nominating governance committee, a compensation committee, and an audit committee are required on a public company board. These must be chaired by independent members of the board, meaning they’re not members of the management team and not significant shareholders of the company.
Privately held companies are owned by an individual, a private equity fund, or some sort of financial firm. There’s no law saying that a private company must have a board. Many private companies have boards because they want to follow governance practices and manage the company as if it were public. In many cases, the private owners exit the company through a public offering of the company’s shares, so having the company acting as if it’s a public company allows for an easier transition.
Nonprofit boards tend to be quite large. Early in my career, I was on the board of the Houston Symphony with about 100 other people. Nonprofit boards try to appoint people who either are known in the community or want to build a name for themselves — members aren’t paid and are expected to donate. Nonprofit boards are the easiest to join. It’s important to choose opportunities that match your interests and are things you care about passionately, while recognizing you’re doing it to help your community. These experiences could help you get a paid board position later.
All three of these roles are different, but all boards support the company’s management and the CEO. They hold them accountable to their actions, follow the company’s plans, and drive overall corporate strategy and priority.
The Differences between Public and Private Company Boards
Not many public company board positions become available each year, as there are a limited number of publicly traded companies in the country. Boards don’t have high turnover unless the company is going through a massive transition. On the other side, there are many private companies, so these opportunities are a good way of starting a board portfolio.
Shareholders elect the board at a public company. Each year there’s an election during the annual shareholders meeting, and through a proxy statement, the company puts up a slate of directors for shareholders to vote on. Typically, that’s noncontroversial, but if there’s an activist stockholder, they may push people off the board so they can get their members on.
For a private company, the owners decide who gets on the board. Members serve as long as the owners want them there. The reason that owners ask people to join the board is that they have a background, skillset, or experiences that will be particularly helpful to the company and the management team.
The primary role of a public company board is corporate governance, while members of a private board serve more as consultants.
It’s almost impossible to be on a public company board and not be assigned to at least one committee. One of the two public companies I work with expects everyone to serve on two committees. Many private boards don’t have committees.
The CEO is often a member of the board at both public and private companies. But they often play a different role in the sense that they don’t always vote on everything and don’t get paid as a board member.
There’s a limited number of seats on private and public company boards, usually somewhere between 7 and 12, so every new board member has to bring something unique. Companies add members to a board because they’re good for that board and not just a carbon copy of somebody who’s already there. Many boards hire on collegiality with the existing team. On boards that work well, candidates will meet all the members before joining. They’ll talk about the culture of the company and board, and they’ll assess not only whether a candidate has the technical and business skills but also if they meet the board’s diversity requirements and that they will all be able to work well together.
How to Be an Attractive Board Candidate
The single-biggest element in boards being interested in you is that you’re a proven executor who can say, “Here’s what I have done in my past role,” with specifics about how you lead and where your competencies are. It was once the case that being a CEO was a big advantage to being on a board. That’s not true today. CFOs, marketing heads, and IT leads can all add value to many boards. Division heads and conglomerates are especially attractive because usually people in those roles manage a budget and people.
Be prepared to cite good reasons why you’re interested in serving on a board and for that particular company. Do your research before you talk to the company. Know about its business, industry, and position. If it’s a public company, read its public documents, maybe listen to its most recent earnings call, and get a sense of what the priorities are. During an interview, be prepared to talk about your board experience.
There are practical things you can do to help get opportunities. First, increase your network connections. You never know where or when the next opportunity may arise. Stay connected to mentors and colleagues and let people know that you want to be on a board. For example, I could say, “I serve on two public company boards. I’d like to serve on a third at some point in a different industry.”
Keep your LinkedIn profile accurate and up to date. The site has a setting that allows you to say you’re interested in board work and that you’re open to recruiters contacting you. If a recruiter is looking for board members and you don’t have that setting proactively set, they won’t come across your profile.
Another thing is to have realistic expectations. According to Heidrick & Struggles, a large recruiting firm, it’ll take until 2025 for public boards to be 50/50 male and female. What that means is boards are more likely interested in women. Recent trends show that more women than men have joined boards.
The process for joining a board is slow. Companies plan for board succession methodically. They know years in advance when somebody will step off the board because of age or the board’s rules on how long someone can serve. Boards are voted on at annual shareholders meetings. That doesn’t mean you can’t be added to a board between shareholder meetings, but it’s easiest to add new members as a slate of people. So it might be possible that the company is 10 months away from its annual shareholders meeting and would say, “Let’s talk about potentially nominating you at the next shareholders meeting.”
The point is to plant a lot of seeds. Make your interest known. Meet with board recruiters in person, if possible. If you know anyone in the recruiting space or know someone who knows someone, have them make a connection. Get on a Zoom call. Maybe in six months, go to their office and talk about your board aspirations, what you’d like to do, and why you’re a strong candidate.
Manage your brand and image, go after the roles that you think you’re the best fit for, and have a good understanding in your heart, not just your mind, of why that company is good for you.
About Ben Baldanza
Ben Baldanza is the former CEO of Spirit Airlines, where he transformed the company into the highest margin airline in North America and created a new model for air travel in the US. Today, Ben serves on several public and private company boards, is an Adjunct Professor of Economics at George Mason University, and co-hosts the popular weekly podcast Airlines Confidential.