Carol Coughlin met Bob DeAlmeida at a CEO Club meeting in Baltimore. They had mutual business friends and got to know each other over time. “We had a good deal of respect for each other and had lunch every now and again and would talk about the business community at large and economic trends,” Coughlin says. “After about three years, he asked if I would be interested in putting my hat in the ring for a board position. I had no idea it was coming. I wasn’t looking for it at the time.” Coughlin has now been on the board of Hamilton Bancorp, a public community bank, for four years.
The board needed a CPA with financial expertise for the audit committee. An entrepreneur, Coughlin has run her own growth advisory firm, BottomLine Growth Strategies, for the past eight years. Prior to that, she had 20 years’ experience as a finance executive and CFO.
“The key to getting that first board seat was networking,” she says. “It was because of my personal connections that I was asked to be on the board. And I have a wonderful mentor who encouraged and supported me in the pursuit of a board seat. She was very helpful in advising me before more interviews.
Getting that first corporate board seat is a challenge, regardless of gender. But it can be tougher for women, who may not have the network that some men have. The old boy network is still alive and well in 2015.
According to the recent Spencer Stuart Governance Survey, of the new directors added during the 2013 proxy year, 24 percent were women. Seven percent of S&P 500 company boards have no female directors, a slight decline from 2012, when 9 percent didn’t have a woman. However, two-thirds of S&P 500 companies have two or more women on the board, up from 61 percent in 2012. While this may not be cause for applause, a decade ago, only 41 percent of boards had two or more female directors.
Progress has certainly been made, but women have hardly achieved parity in the boardroom. Although today’s directors are under more pressure than ever from activist shareholders, 24/7 media scrutiny, global risks, economic uncertainty, and a host of other concerns, serving on a board is still a career boost and offers an opportunity to make a difference. A seat at the table is highly sought.
It’s not only the women on corporate boards themselves who benefit. Companies feel the impact on their bottom line. Catalyst, an organization that works to advance women in the workplace, notes in a 2007 report, The Bottom Line: Corporate Performance and Women’s Representation on Boards, that Fortune 500 companies with the highest representation of women board directors attained, on average, significantly higher financial performance (return on equity, return on sales, and return on invested capital) than those companies with the lowest representation. In addition, Catalyst research found notably stronger-than-average performance at companies with three or more women board directors.
Similarly, Credit Suisse Research Institute’s 2012 report, Gender Diversity and Corporate Performance, found that over the prior six years, companies with at least one woman on their board had an outperforming share price compared with those companies with no women on their board.
So, given that there is fierce competition for board seats, what’s the secret to standing out and walking away with a plum board assignment?
Be passionate about why you want to serve. If you’re not 100 percent sure of your readiness for and commitment to service, get yourself there. Passion and commitment shine through in the screening process, says Solange Charas, a senior-level HR executive, New York University adjunct professor, and board member of the Thirty Percent Coalition. The coalition, an organization of senior business leaders, institutional investors, corporate governance experts, and others, is pushing for women to hold 30 percent of board seats in public companies by 2015.
When Nancy Mellard, executive vice president and general counsel for CBIZ Employee Services, gets on a board, she joins with the intent to chair the board. “If you are not committed or passionate, then why are you even going on a board?” she poses. “You need this attitude when you are trying to get on a board.”
However, if you’re pursuing a board for money or recognition, you might be doing it for the wrong reasons and, in the end, could have an unfulfilling experience and be detrimental to the board, says Charas. Being on a board is hard work, requiring 100 to 250 hours a year. It isn’t glamorous. There is a lot of scrutiny and accountability.
What’s your value proposition? For example, if you’re an experienced CPA in the same industry, and one of the company’s directors on the audit committee is retiring, that’s a spot you can fill. What can you uniquely offer a board? If you don’t know the answer, you’re not ready.
Know the board
Pick companies that mean something to you. “It will be harder to get on a board if you don’t invest the time and energy in knowing the board and board members. Close to 80 percent of boards recruit from their networks, and only 20 percent use executive search firms,” says Solange Charas.
Learn about the board members. Study the backgrounds of the current directors and others who serve the board, like the general counsel and the CFO. See if you’ve crossed paths with anyone in the past, through a common school, employer, or professional association, for example.
Assess what the board wants. The nominating and governance committee will have a clearly articulated list of required criteria for selection. Sometimes this is disclosed in the committee charter, but not always. Do your homework. “Learn what the board considers ‘must have’ skills and competencies if you can, and craft your value proposition to meet those needs,” says Charas.
According to the Spencer Stuart survey, the top five on the “wish list” for the background of new directors includes minorities (56 percent), women (54 percent), active CEO/COO (54 percent), financial expertise (47 percent), and industry expertise (44 percent).
Among the critical things that boards consider after screening for perfunctory skills are compatibility and cultural fit, says Suzanne Garber, who serves on a few corporate boards and is a member of WomenCorporateDirectors, an executive networking group dedicated to getting more women on boards.
Board expectations are somewhat contradictory, says Jackie Parker, president of the board of OnBoard, a nonprofit that works to get more women on boards. “They are seeking diversity in perspectives and experiences, but they are also cautious about new board members fitting into the culture of the board.”
Serve on a nonprofit board first
Ileaa Swift was interested in joining a board that dealt with issues affecting African American women. She researched the Arkansas AIDS Foundation, learned about its cause and efforts, and mapped out a plan for how she thought she could make an impact.
Swift, the owner of Swift Travel Deals, contacted the foundation’s executive director to voice her interest and ask if she could meet with the director and sit in on a board meeting.
“After the initial meeting with the executive director, I found out more about the mission and responsibilities of the board members,” she says. “I put together my plan of action, detailing how I could help the board and foundation, highlighting my strengths that might be beneficial to the board with a detailed letter explaining why I wanted to join the board.”
That letter and overview earned her a meeting with the board, and she was voted in.
“As an African American woman, joining the Arkansas AIDS Foundation was a way for me to help educate other minority women about the AIDS epidemic and to help others receive funding that they need for medical supplies,” Swift says.
Paul Lapides, executive director of the Corporate Governance Center at Kennesaw State University in Kennesaw, Georgia, says that serving on the board of a public or government agency or a nonprofit organization is a great place to start for many. “You can make a difference, meet and work with talented individuals, and get board experience,” he says. “Advisory boards are also worth considering, if this is a good fit for you and the company. Please don’t join any board because you want to use it as a stepping-stone to join a public company board. Do it because you think you can make a difference.”
While at a nonprofit, “hone your financial capabilities. Serve on the audit committee,” says Cindy Burrell, president of Diversity in Boardrooms, an executive search and board-consulting company. Financial skills will always be in demand.
When it comes to nonprofits, size matters. “Go for the big names, like the American Cancer Society, not just a local charity,” advises Rick Guzzo, co-leader of the Mercer Workforce Sciences Institute.
Study up on corporate governance
Attend a “get ready” program with OnBoard Development Group (onboardnow.org) or a similar program offered by other organizations, which helps to get women closer to their goal of serving on a for-profit board, suggests Lapides.
There are numerous corporate board-training seminars and workshops. The National Association of Corporate Directors has an online course, “How to Become a Director” (nacdonline.org). Read Women on Board: Insider Secrets to Getting on a Board and Succeeding as a Director by WomenCorporateDirectors members Nancy Calderon and Susan Stautberg.
“Familiarize yourself with the Dodd-Frank Act, SOX, audit requirements, and financial reporting, as well as corporate governance policies,” says Lola Gershfeld, CEO of Level Five Executive, a consulting firm specializing in board dynamics.
Network, network, network
“The best way to get your first board job is how you got your first job: network, network, network,” says Suzanne Garber.
Make connections with local incubators, accelerators, and business schools in your city. “Many new companies need all the help they can get,” says Kelly Keenan Trumpbour, who invests in female-founded companies and sits on the board of one of them, Hip Chick Farms. “If you are willing to work with an early-stage company and not get paid, you can make a huge difference in their growth and prime yourself for future offers.”
“If you’re an accredited investor, consider working with programs like the Pipeline Fellowship,” says Keenan Trumpbour. “I received my first board seat with Hip Chick Farms by investing in tandem with other women in the Washington, DC, chapter of Pipeline. In order to participate with us, the company had to agree to offer a board seat. I was nominated by my co-investors and was happy to have the experience. The minimum investment is $5,000.”
Ask people who are on boards and who have seen you in action demonstrating the skills that will be useful in the boardroom if they think you are ready to serve as a director. If they say yes, ask them to pass your name along when they are contacted about board opportunities. “If they aren’t sure you’re ready, ask for direct feedback about what is missing and then undertake an action plan to fill any gaps in your experience,” advises Susan Ellen Wolf, CEO of Global Governance Consulting.
Be ready when the opportunity arises
Follow the lead of Karen Kessler, president of Evergreen Partners, and seize the day. “Twenty-five years ago, I was approached to join the board of directors of my local community hospital. The board was seeking to diversify and thought having one female board member might do the trick. Two decades later, I have now served for six years as chair of the board of Atlantic Health Systems, a $2 billion health-care system.”
What does a corporate board do?
Board members have vast power and responsibilities. Every board is different, and its duties are determined by the company’s bylaws. Here are some of the primary priorities.
• Takes fiduciary responsibility for the corporation’s finances and legal requirements, and helps manage risk
• Acts on behalf of shareholders
• Ensures that the company stays on track with its mission, goals, strategy, and more, and helps set its agenda
• Establishes policy and monitors procedures
• Serves as overseer of management, hires and fires the CEO, and plans for the CEO’s succession
• Tackles executive compensation, compliance, and ethical issues
Sheryl Nance-Nash is a freelance writer specializing in personal finance, small business, and general business.