Board service is becoming an increasingly attractive career option. Although the traditional director is an ex-CEO or other high-level executive, professionals from all fields can leverage their skills to earn a board position. This chapter outlines how various professionals, such as entrepreneurs, academics, financial professionals, private equity professionals, engineers and other technical professionals, and lawyers can contribute to a board. Finally, this chapter also addresses the myth of being too young or too old to become a director.
The main takeaway from this chapter is that diversity of thought is a plus for all boards and having a diverse background may be useful for a prospective director. As the general rule, there is no objectively perfect board or a perfect director. There are, however, certain boards and directors that are a perfect match.
Do Academics Qualify to Serve on a Board?
Academics may play a role on a board. A reputable, well-known, influential academic serving on a corporate board of directors tells a lot about a company and its prestige and reputation. It is important for a company to include directors who deeply understand the subject matter that is core to the business.
Academic leaders who have any entrepreneurial experience, who understand real-world business outside the academic context, and who have important and relevant subject-matter expertise may be very attractive to the board of directors. An academic may bring the following qualities to a corporate board of directors:
- Strategic skills
A board is always in need of new strategies to take the business to the next level. Generally, most boards are looking for problem-solving skills, leadership qualities, strategic thinking skills, and an industry understanding. Depending on one’s individual experience and interests, an academic may already have these strategic skills and will be able to convey the depth of company’s and its board’s expertise in a certain, often niche, subject matter.
- Interpersonal skills and professional judgment
A board also wants a professional with good interpersonal skills and good professional judgment. Depending on their experiences and focus, some academics may excel in discussing important and controversial topics and objectively analyzing evidence to find the right answer. Academics may also excel at maintaining transparency in professional relationships and collective undertakings.
- Diversity of thought
Diversity of thought is an asset for a board. Academics may bring much-needed diversity to a board as well as a rigorous hypothesis testing methodology. They can also help the company evaluate different viewpoints toward relevant issues, strengthening its core operations.
- Experiences on the cutting edge of research
Usually, companies look for experienced and mature directors, with an excellent amount of experience in the same industry. Academics can have skills, experience, expertise, and knowledge in areas where they have spent a lifetime researching, teaching, and publishing. In fact, they may be on a cutting edge of the research which may be a substantial advantage in more experimental, new, or science-driven industries.
Do Entrepreneurs Qualify to Serve on a Board?
Entrepreneurs may be qualified to serve on a board. It is essential that an entrepreneur board candidate has enough experience operating a business, often in a relevant or adjacent industry. An entrepreneur may bring the following qualities to a corporate board of directors:
- Good business judgment
Good business judgment is the prime skill of every director. An entrepreneur’s board profile, biography, and resume/CV often demonstrate a track record of hiring good people, making sound business decisions, having industry knowledge and deep important relationships, as well as overall good judgment.
- Knowledge and skills
Another essential point is that an entrepreneur should be knowledgeable about relevant trends, practices, key stakeholders, and ethics. Entrepreneurs often demonstrate a strategic and technical point of view. They display a track record of handling certain important situations and milestone events (such as overseas expansion) successfully and systematically. An experienced entrepreneur is most likely to have good judgment skills and great knowledge.
- Industry dedication and insights
If an entrepreneur is highly attracted toward working in this company’s field, chances are high that they can produce productive positive results. Being passionate about your work is the key to success. An entrepreneur will often demonstrate a deep passion and long-term commitment to an industry.
- Unwavering focus
Entrepreneurs often devote significant time and effort to the organization. Many professionals are interested in getting on a board but do not have enough time to be truly focused on a new organization. It is essential that every director makes a serious time commitment to their organization. An entrepreneur is often able to demonstrate unwavering focus and interest in their organizations’ success.
Do Professionals with Financial Backgrounds Qualify to Serve on Boards?
Professionals with backgrounds in finance are sought after for boards. Some companies even prefer candidates who are qualified “finance experts.” In any event, accounting and finance are the language that companies speak, and professionals who are fluent in these areas are generally highly desirable.
Financial education and experience in the industry where the target company operates are very important. When choosing a director with financial expertise, companies often look for the following:
- Work experience
Excellent work experience is important, especially in the relevant industry. Companies prefer to hire directors with a deep understanding of specific and relevant financial issues. Companies, especially public companies, have historically preferred on boards working CEOs or chief financial officers (CFOs), especially those from Fortune 500 companies.
Have you held titles such as CFO, treasurer, vice president of finance, director of finance, director of accounting, director of financial reporting, corporate controller, controller, divisional controller, or a similar title? Have you dealt with tax, compliance, generally accepted accounting principles, financials, modeling, budget, treasury, costs, Securities and Exchange Commission (SEC) and other regulators, tariffs, audit, and similar issues? If so, make sure that your board profile, board resume/CV, and board biography indicate the size of the budget that you managed, transactions that you led, and milestones that you achieved. Include this information in the beginning where it can be easily found.
- Financial education
Relevant and current financial education, training, and credentials are important. Be sure to emphasize your finance and accounting-related credentials, certifications, and coursework. Also highlight any specific educational or membership milestones. For example, if you are a certified public accountant (CPA) that is highly relevant information.
- Continue your education
Keep yourself updated about new financial requirements, especially those that affect your industry or companies. Consider attending industry events that focus on finance and accounting, especially in your industry. Network and keep in touch with CPAs and other finance and accounting professionals. Make sure you read financial literature including books, newspapers, academic papers, industry white papers, and blogs. This way you can keep your hand on the pulse and stay conversant about important financial issues.
Do Private Equity Professionals Qualify to Serve on Boards?
Private equity professionals can be valuable prospective directors for many reasons such as the following:
- Understanding financials and operational mastery
Private equity professionals are sophisticated about finance, accounting, and operations. Therefore, they may be valuable prospective directors, especially if they have relevant industry experience. They may be very helpful in advising the board about the best ways to raise money, reduce operational costs, and minimize related risk. They are also strategic in their thinking and execution. Their experiences are deeply rooted in the operational realities of a business.
- Mastery and management of investments
Private equity professionals may be well positioned to help companies that are involved in investments because they may have helpful insights, experiences, and relationships. For example, they can help manage expectations about expected returns or help structure investments. They may also be able to monitor company investments to ensure that their performances meet management’s expectations. Finally, private equity professionals can be instrumental in helping the board to structure its strategy for acquiring or selling various assets.
- Superb experience, expertise, and training
Private equity professionals often go through rigorous training process consisting of valuable experiences and education. Therefore, many private equity professionals consistently have stellar education, impressive experiences, and a track record of impact. Moreover, on-the-job training often contributes to their superb experience, expertise, and a high degree of financial literacy.
It is helpful for engineers and other technical professionals to be skilled in the arts and sciences that the target company practices to at least some extent. In addition to their substantive technical skills, engineers and other technical professionals may bring other value to a corporate board of directors.
- Innovative ideas
When engineers and other technical professionals serve on a board, they may be instrumental in ensuring that the organization is moving with the times by bringing in new product or manufacturing ideas to benefit both prospective and existing customers. This helps a company stay innovative, relevant, and competitive. It also helps companies recruit and retain technical and product talent.
- Quantitative skills
As expected, engineers and other technical professionals are often strong in mathematics and science. This means that they also tend to be very good at understanding product-related or research-related quantitative information. They also tend to understand financial and accounting information and trends, be able to comprehend a large volume of quantitative data, and systematically ask relevant questions.
- Practical experience of building desirable product and services
Engineers and other technical professionals often have education, training, skills, experience, knowledge, and expertise in building products and finding product-market fit. They may be useful to have on a corporate board of directors when a company considers launching a new product offering, changing an existing product offering, expanding its product offering to other geographies, acquiring other products to add to its portfolio, or dealing with technical regulators such as the US Food and Drug Administration.
- Experience researching and building products
Engineers and technical professionals who have worked their way up to becoming a director are often proactive in nature and have experience listening to customer feedback. They often have the knowledge and technical know-how to spot a problem and have it tackled in a professional way before it will even surface. They can also help the company listen and interpret customer feedback.
What Experiences Can Lawyers Bring to a Board?
There has been a continued argument about whether lawyers should be part of a board of directors or not. Lawyers can bring many experiences and skills to corporate boards of directors:
- Influencing others and independence
Lawyers spend their careers advising and influencing others on specific issues and risks which may be affecting their companies. They give their independent advice on the options that a business may have. A lawyer can transfer these skills to board service and be a useful voice of reason for a board. Showing their experience in managing a business sector can be very important.
- Conflict resolutions skills
Disputes, legal or otherwise, arise for all companies. For some, they may even be routine. Lawyers are generally good at strategically managing and advising boards of directors about navigating risks at various stages of conflict. Lawyers may add value to businesses that have a high conflict or litigation risk.
- Risk-management experience
Lawyers often have experiences managing risks related to procurement, contracts, patents, property, government regulations, international expansion, mergers and acquisitions, initial public offering , and numerous other areas. Depending on their experience, they may also have broad exposure and management experience in legal and business issues. This can help lawyers provide a useful perspective to boards.
- Great communication skills
Lawyers spend a lifetime perfecting their communication skills in many settings and circumstances. They negotiate, mediate, argue, influence, educate, relate, advocate, and strategically communicate throughout their careers, all of which are an asset for a board.
- Analytical skills
Lawyers are skilled at deliberately learning, analyzing, and interpreting various situations and risks, as well as making decisions and acting upon these learnings and insights. These are very helpful qualities for directors. A lawyer on a board can help to structure a discussion, assist in decision making, and act in a more logical and systematic way.
- Researching skills
Proper research is the hallmark of legal education and practice. It is an essential foundation for managing risks and coping with uncertainty. Lawyers can help a board to research and educate themselves better. They are skilled at making sense of a volume of information, identifying missing information, and finding ways to fill in the gaps systematically. They can also be helpful in framing and reframing questions for a board to focus on.
- Problem-solving skills
Attorneys are experts at solving problems strategically and intentionally. The following skills are helpful for many problem-solving challenges:
- Attorneys possess substantial intellectual qualities and skills to complement the other existing corporate directors.
- They are comfortable handling the social and intellectual complexity of the corporate boardroom.
- They can masterfully navigate major perspectives, legal issues, and ethical dilemmas.
- Lawyers have the skills to analyze and address business challenges.
- They can contribute useful insights and bring diversity to boardroom debates.
- Lawyers can facilitate crucial decision making in the boardroom.
- Lawyers are trained and experienced in absorbing and analyzing large volumes of information and documents.
What Age Is Too Old to Serve on a Board?
Historically, the average age of a corporate director is a little over sixty. To an extent this makes sense. Many companies want professionals with a successful career full of achievements, skills, experience, expertise, and knowledge to serve on their corporate boards. For most directors, especially at public companies, board service is an appropriate career move after a successful and thriving professional career, often in the same industry as the company where they serve.
The age of directors (and their term limits) is a much-discussed topic in the corporate world today. Ultimately, just like everyone else, seasoned professionals must articulate the answers to two fundamental questions: What unique value do they bring to a corporate board of directors, and what will they do to stay relevant?
Professionals with longer careers tend to have a larger wealth of education, training, experience, expertise, achievement, and knowledge that helps them to articulate their unique value proposition for a corporate board of directors. They also tend to have a wider and deeper network of professional contacts and might have a historic perspective on a company or industry.
These professionals also tend to a have a longer track record. They often command respect due to their achievements and age. Historically, some companies may consider age as an asset for corporate boards because age highly correlates with the attributes that many companies seek.
Yet every professional, of any age, who wants to serve on a board of directors must be able to articulate how they will stay relevant in an industry that may be changing quickly. How will you help promote new thoughts and understand new trends? How will you stay on top of your industry and profession? What classes or experiences will you seek? What books and periodicals will you read? What experts will you use to help you stay up to date? How will you educate yourself about new technologies, developments, and trends?
Regardless of age, it is important to understand your responsibility to stay relevant, active, and educated. While there may be a correlation with age, age is a red herring that must be ignored in favor of evaluating each candidate’s qualifications a fit. The average age of larger public company boards has increased in the last few years. Unlike most jobs, the ages of board members (and key executives of SEC-reporting companies) are public information. Some boards have age limits, which has been increasing as well. There are arguments in favor of, and in opposition to, the policy of retiring directors because of their age just as there are for the use of term limits.
This is the era of new thoughts, technology, and ideas, which has completely dominated the business world in the last few decades. Younger professionals are increasingly present on boards because they bring fresh ideas, start new trends, can connect with a company’s customers, understand the digital world, and help overcome the boring persistence of old ideas and the status quo.
Younger directors can enrich a board with their new thoughts and ideas. They can fill the potential gaps of a growing business. As a young professional, your hunger, passion, and creativity will help you add fuel to your board journey.
One of the secrets of a successful board is diversity of thought. A well-balanced board with different points of view, ages, experiences, strategies, opinions, and voices can better reach business goals. And many boards are becoming more open minded about young board candidates.
Consider approaching a board service strategically and early. While it can be very daunting to start a career as a director, especially at a young age, it may be a prudent approach because it may ultimately help your build you career and start preparing for board service early.
For example, serving on a board may be an amazing experience that goes along with (not after) your career. It may increase and enrich your opportunities, knowledge, skills, experience, visibility, and network. As a young director consider these strategies to position yourself to serve on a corporate board relatively early in your career:
- Emphasize fresh ideas, new approaches, emerging industries, and cutting-edge technology
In articulating your board value proposition, consider emphasizing your fresh ideas, new approaches, experience in emerging industries, and knowledge of cutting-edge technologies. Do you know about emerging market trends that many people miss? Do you understand how new technology will impact the industry, company, products, disciplines, consumer behavior, regulations, or supply chain? Are you fluent in new, emerging, and hot technologies, such as Internet of Things, artificial intelligence, virtual reality, or blockchain? Make sure that you develop deep expertise in these new and exciting areas.
- Develop broad thinking and leadership skills
Boards generally focus on planning and strategy, not minutiae or day-to-day operations. Seek experiences and assignments with broad roles, be able to think strategically, and lead. Routinely ask yourself: Do my current opportunities give me the full picture? Am I progressing in developing my skills? Do I routinely participate in setting strategy? Am I part of the P&L discussion? Am I responsible for a sizable budget? If you sense that your current role is not preparing you for board service, seek out new projects or even employment that connect you with more strategic, leadership roles.
- Actively and intentionally consider how board service may enhance your career today
Becoming a director early will provide you with learning, growth, expertise, experience, and networking opportunities that will help your career as well. Consider educating yourself about the richness of board opportunities—nonprofit, startup, family businesses, private companies, public companies, and Fortune 500.
Understand that between nonprofit and Fortune 500 boards, there is a rich middle ground of opportunities that most professionals completely miss. Appreciate how these opportunities are different, where you can provide value, and how they can go along with your career. Board opportunities of all kinds may help you grow your career, boost your leadership skills, increase your expertise, provide new challenges, present opportunities to give back, and expand your network.
- Intentionally grow your network deep and wide early
You are never too young to strategically grow your network. You want to make sure that your network is vast, composed of people from various disciplines, backgrounds, and perspectives. Consider including current directors, chairpersons, CEOs, executives, founders, vice-presidents, industry influencers, subject-matter leaders, and numerous other professionals who work with boards of directors. This will give you a head start on your board journey.
- Embrace the digital age and new technologies
The digital age is here. The Internet offers a wealth of opportunities to learn, acquire skills, and expand your network. Take advantage of the numerous social platforms to start building your professional reputation early. What is your digital reputation? What are you known for? Do you regularly share content consistent with your reputation and values? Are you becoming an expert in a certain subject matter, industry, or geography?
- Develop an international perspective and presence
In the increasingly global economy, a genuine understanding of international culture, market, environment, technology, entertainment, and trends is valuable. It also takes time to develop these qualities and skills. Consider developing your world intelligence quotient (IQ) and worldview early. Seek out jobs and assignment with international responsibilities, network with peers in your global company, travel, learn about markets, and get involved in international organizations and nongovernmental organizations.
Appendix A features a Board-Ready Thought Leader worksheet that you can use to plan your board readiness at any stage of your career.