As boards are opening their doors to a wider range of candidates, there is also greater competition for places. So how do you prepare to become a company director and secure the right position?
With top companies appointing women directors at a faster rate than ever before, and boards increasingly under the media spotlight, a new era is beginning in Australia’s boardrooms.
According to figures from the Australian Institute of Company Directors (AICD), 42 per cent of all directors appointed to ASX 200 boards so far this year have been female, and women now account for 23.6 per cent of board members.
The public image of boards is also changing. Over the past decade, they have come out from behind the scenes and into the public eye, creating a greater awareness of their role and responsibilities and increased interest in boardroom positions from candidates of all ages.
Libby Marshall, Associate Director of UQ Business School’s MBA program, says: “Ten years ago boards were hardly visible – while we knew they existed, there was little talk about them,” she says.
“Now boards have a much higher profile. Many of our students aspire to become a company director and boards have become more accessible, but there is also greater competition for places. While there is a need for diversity, being a woman or from a minority group is not a qualification in itself – you will have to prove your true value.”
While a directorship may offer long-term career benefits, it is not something to be entered into lightly, warns Libby. “Directors carry a lot of risk because they are responsible for the company’s actions and its financial viability. Even if you are taking on an unpaid role with a charity because you are passionate about the cause, you still hold the same responsibility as if you were a director of Qantas.”
For those still intent on becoming a director, here is some advice on how to secure the right position and what to expect in the role.
• Understand your value proposition
With greater competition, boardroom candidates need to consider carefully what they can offer. Libby, who has been a director of both Tourism and Events Queensland and the Celebrate Queensland Committee, advises: “You have to know what value you can bring to a board and how to articulate that. What is your skillset and area of expertise?
“A CV for a board position is not the same as one you would use to apply for a job. It needs to include more about your experience in strategy and leadership, and skills such as creative thinking and the ability to see things from a different perspective.”
She says candidates also need to know what is required of directors, have a good understanding of governance and the ability to read a balance sheet. Organisations like the Australian Institute of Company Directors, the Governance Institute and Women on Boards offer training.
Experienced chairman and company director Dawson Petie advises: “Think of your CV as a marketing document. You need to package and sell your skills in a concise and clear way. If you don’t have director experience, most executives have regularly presented to boards or participated in board strategy meetings. Highlight these experiences to demonstrate that you know how boards operate.”
• Develop your networks
Unlike ten years ago, today’s would-be directors are not likely to get a tap on shoulder – they have to work hard to seek out opportunities. According to Dr Sarah Jane Kelly, networks are central to the whole process.
Dr Kelly, who heads UQ Business School’s MBA program, sits on the board of the Brisbane Lions AFL Football Club and has also recruited directors for her own companies.
“Your networks will often get your name in the pool,” she says. “Candidates, especially those who are younger or less experienced, need to spend a lot of time cultivating contacts across a wide range of fields.
“Women sometimes get it wrong as they don’t see the need to invest time in face to face networking. Surprisingly, senior people don’t mind being asked out for a coffee or for some friendly advice.”
“Companies will also use candidates’ networks to check their credentials – not only ringing referees but viewing their contacts on LinkedIn to find out who they know. There is a lot of underground detective work that goes on, including ascertaining the candidate’s word of mouth reputation among industry colleagues.”
Dr Kelly says boards are now very strategic about who they recruit, and want to know what new members can bring. She echoes Libby Marshall’s view that it is critical to convey what you can offer - particularly for those applying through executive recruitment agencies for whom a letter will be the first point of contact.
“Having been in the boardroom when these decisions are made, I can say that the cover letter is everything - make sure you have communicated your unique value propositions very clearly,” adds Dr Kelly.
Alison Sherry, who is on the board of RSPCA QLD and National Veterinary Care Ltd, recommends finding a mentor. “A committed board mentor will assist you in formulating a tailored and targeted board CV, introduce you to their networks and provide valuable guidance throughout the recruitment process and during your first few months and beyond,” she says.
• Understand the dynamics
While training courses are a useful stepping stone, formal training by itself cannot fully prepare candidates for the cut and thrust of boardroom life. Directors need to be politically savvy, with a high level of emotional intelligence and an understanding of group dynamics.
Dr Kelly says: “You need to know when to listen and when to speak up and you should also choose your battles. Understand the boardroom norms, and learn about the background of each member and what drives them - all the time, drawing on your understanding of your role and what good governance means.
“Invest time in maintaining good communications with your fellow board members and building strong relationships. If you are concerned about an issue between meetings, sometimes it doesn’t hurt to make contact with another board member.”
Alison Sherry agrees that the four-week break in communications between meetings can be too long for key issues. She also suggests that first-timers should align themselves to a more experienced board member and ask if they can seek advice and guidance as required.
• Be aware of what’s going on
Board members need to keep an ear to the ground and be well informed, says Dr Kelly. “Talk to people at all levels, and not just executives,” she advises. “Say hello to the person on the door, chat to people you meet in the building - you will quickly pick up information and get an insight into the culture. As an officer of the company, it’s your duty to try to find out what’s going on. Sometimes performance issues may be apparent but board members don’t understand what’s really going on.”
Board members should be visible and approachable. Other ideas include seeking presentations from key executives and sector leaders, and attending company forums and open days.
• Ask difficult questions
Boards are under scrutiny as never before, and failures of governance can result in international media attention. Directors need to maintain integrity at all times. Libby Marshall says it is good to be inquisitive. “Directors have a duty of care and should not be afraid to ask questions, especially since they can be held liable. If the worst happens, it’s no use trying to say the CEO has pulled the wool over your eyes. There are no excuses as a board director.”
Where directors don’t feel comfortable with what is going on, and feel their warnings are not being heeded, she believes it is better to resign rather than put yourself at risk.
• Be ready to lean in!
With research showing that diversity on boards benefits the bottom line, the make-up of boards is finally changing. However being the ‘odd one out’ - the only woman or the only person with a disability in the group - can be uncomfortable, regardless of how welcoming the other members are.
You may also find that the system is not geared up to your needs. For example, in her book ‘Lean In: Women, Work and the Will to Lead’, Facebook’s CEO Sheryl Sandberg recalls attending meetings in venues with no women’s toilet.
Dr Kelly urges candidates to have the courage to be a pioneer: “If you get a shot, take it and run with it, and become an advocate for others.”
Ultimately, potential board members need to be prepared for a long game, says Alison Sherry. “It is not easy to get on boards – not-for-profit or listed. Be prepared to use your networks, find a committed mentor, find a great board recruiter, be active and target your applications. Always remember not to personalise rejection – learn from the process and build your resilience. The right opportunity will come along if you persist with your goal.”