What makes someone “board ready?” And what are some of the most in-demand skill sets right now? Corporate boards are under increasing pressure to diversify their ranks — adding more women and minorities, as well as executives with different cultural and functional backgrounds — to better represent the people their organizations employ and serve. At the same time, the bar for “board readiness” has never been higher: Directors are scrutinized for their ability to understand more complex businesses, demonstrate technical know-how, deliver effective governance, and generate sustainable long-term performance.
YPO recently hosted a panel of YPO member experts to offer advice on board readiness and demystify the role for new candidates. Here is an excerpt.
What makes someone board ready?
For Shannon Gordon, CEO of theBoardlist, there is no concrete answer since, unlike clear and structured job descriptions, board roles depend on the company and type of board. “It varies between serving on a nonprofit board, on the board of a private company — and within that, the stage of growth or size of the company — or on the board of a public company,” says Gordon. “With those caveats aside, a few of the loose criteria we think about is individuals who have reached a point in their career where they have a set of experiences multiple times. For example, if someone IPOed once in different contexts or with different companies. So, a kind of depth of experience from different contexts is one criterion.”
She adds that some degree of P&L ownership and exposure is also essential. “Boards look for someone who can advance their thinking, usually in a particular topic or area that they are being recruited for — to the extent not only of their operational experience, but also their ability to rise above and serve as strategic advisers or have the capability to do so.”
What are some of the specific skill sets that are most in demand?
Gordon says that often boards will go through a matrix activity, where they map the needs of the company over the next three to five years, anticipating some of the strategic challenges that the company may face and mapping skills that are represented on the board to meet those challenges. This way, boards identify coverage areas and, more importantly, gaps. “Candidates need to understand that usually when a board comes to you, they have a clear view of what expertise they are seeking. That can take different forms, but boards have become very specific and more functionally oriented.”
As an example, Gordon cites specific functional technology expertise, like artificial intelligence (AI) or cybersecurity, or industry experience in targeting millennials. “It’s a team that is built with the intention of compensating for each other’s gaps. There is a clear reason why each person is sitting around the table. Oftentimes, the seats are limited,” she says.
Mark Hamill, CEO and Founder of The Naked Headhunter, says that some of the skills relevant at the moment include scaling and exiting businesses, international growth, new market entry, managing diverse shareholders, decision making at the board level, the functionality of the board, and helping constructive boards. He adds that there is a softer skill often overlooked: “an ability to share battle scars and be authentic and vulnerable with other board members.”
For Hamill, everybody’s experience can be relevant for a particular board. “Never believe that you cannot share an experience or add value. But, as Shannon says, having done it multiple times in different scenarios can give you a significant advantage.”
How do you know if you are being considered for a board position because of your gender or ethnicity?
Shimi Shah, CEO of Carousel Solutions FZ-LLC, explains that no one will tell you directly that you are getting a job because you are a woman or an ethnic minority. “There are ways you probably can tell. But for me, what’s important, even if you are selected on gender or ethnicity, is that this should be the last tick box. The core tick box is that you have the right skill set, the match and experience for the role.” She adds that, although controversial, she believes in the power of positive discrimination if it allows more women, young people and ethnic minorities to get on boards — as long as it is based on eligibility and skillsets.
In terms of tokenism, Shah says, “I am not a big fan of quotas for percentages of women to be on boards. I think that leads to potentially fostering tokenism rather than creating high impact boards.”
In the end, whatever the board’s motive, she believes the candidate should assess any board opportunity by looking at the company proactively. Shah asks, “What is their diversity and inclusion policy? How many women at middle management? What is the culture of the organization? In many cases, that follows through at a board level.”
I am interested in sitting on a board. Where do I begin?
Gordon encourages any CEO or senior executive thinking about board service to spend time on introspection before seeking board opportunities, including thinking through the tactical side in terms of capacity and time required. She adds, “Another thing to consider is the overlap between your areas of passion, your experience and the board’s needs. Be thoughtful about that as you put together the value proposition for yourself and the kind of companies you want to target.”
From her experience, she has seen many candidates with a wealth of expertise positioning themselves as, “Jacks of all trades.” Gordon adds, “But, because of the board’s selection process, it can come off as a master of none. Be clear. Narrow it down to two or three things. What is the value proposition that will benefit you and the company?”
Despite all the preparation, she adds that this is a “massively networked process.”
Gordon explains, “Classically, board directors are identified through recommendations from other board directors and other CEOs. So, to the extent that you can share that value proposition that you defined yourself with your network, you are empowering your network to go out and make introductions for you and help you get your foot in the door. But they can only do that if they know what you bring to the table and what kind of company you are targeting. The best thing is to get crystal clear on that and then light up your network.”
What are some of the common mistakes candidates should avoid?
Hamill adds that in addition to “owning the search process, networking like crazy, stimulating conversations and being lazer-focused on where you can add value, it is important to reach out and not wait for the phone to ring.”
In addition, he places emphasis on curiosity before and after the onboarding process. “The single common mistake is not being curious enough, not doing enough preparation. So much information is out there if you are preparing for an interview. And then, be honest with yourself on whether you are relevant and suitable.”
Once on a board, Hamill mentions a second common mistake leaders make is not trying to figure out what the real issue is. “Figure out for yourself and again have the curiosity to explore what is the problem and challenge in this organization without taking things for granted.”
The courage to question the majority consensus is such an important skill for board directors. It is probably one of the greatest and valued characteristics that you can bring to the board. ”
— Shimi Shah, CEO of Carousel Solutions FZ-LLC share
Shah adds that it is also important not to position yourself too broadly. “For example, at a time when Environmental, Social and Governance (ESG) has become a priority for many boards, don’t say you’re an ESG expert, as that is too broad,” she says. “Narrow down into your experience, and this adds to your integrity, which is fundamental in my books.”
Once on the board, Shah believes another mistake is not being courageous enough. “The courage to question the majority consensus is such an important skill for board directors. It is probably one of the greatest and valued characteristics that you can bring to the board.”
What is the value for the individual that offsets the time and engagement?
Gordon explains that this is another important consideration before pursuing a board experience. “Some candidates have reached a point in their careers where they are interested in giving back to the broader industry or helping other leaders,” she says. “This is often a strong motivation, driven by a true and genuine desire to make use of their experience.”
The second motivation is someone still in an operating role but seeking professional development. “For these candidates, the No. 1 reason is the ability to get exposure to other businesses and other teams,” she says. “The added benefit is bringing back learnings to the day job while meeting new people and extending your network.”
As for professional fees, Gordon categorizes these into three broad segments, with nonprofit boards usually offering unpaid roles and, in some cases, requiring financial contribution or fundraising effort.
On a public company board, compensation is set and transparent to the public, consistent with all board directors. “The messiness comes in the middle. For many private companies, compensation will be more heavily weighted to equity versus cash, though some later-stage companies may also have a cash component to the compensation,” says Gordon. “There is no perfect advice other than getting a couple of benchmarks for specific opportunities to understand what is reasonable. From there, use your assessment to determine if the compensation is appropriate for you.”
When is it a good time to take on an external board role?
Shah says that board membership is not necessarily for experienced CEOs coming to an end of their full-time operational career and looking to transition. “We need more younger CEOs and directors to bring new insights to the table. It is never too early to start thinking about what the board journey looks like. Age and experience should be specific to the needs of the board. It is never too early and never too late,” she adds.
Throughout the discussion, one common theme emerged: the importance of networking.
“Part of the reason board roles feel a bit mysterious to people is because so much of it happens via networking and referrals. These are not roles that are posted or easily accessible unless your network introduces you to the opportunity,” says Gordon, adding her final piece of advice to aspiring board members: “Building yourself a successful career with people that are supporters and sponsors is probably the most effective thing you can do in a step toward the boardroom. Do good work, build a great network for yourself, and that will pay a dividend in the long term.”