Job Hunting

How to Get On a Public Company Board

While serving on a board is often thought of as a late-career event, if you don't start working toward it much sooner it likely won't happen.
John ToueyFebruary 5, 2015
How to Get On a Public Company Board

Based on conversations I’ve had over the past several years, there are a lot of CFOs who want to serve on public company boards. Many see it as part of their long-term, post-employment career plan. After doing their bit for king and country, they will retire to a life of golf, grandkids and fully funded quarterly board meetings supplemented by the odd finance committee conference call. Sounds like a nice retirement (sign me up)!

John Touey

John Touey John Touey

The problem is that this goal is often expressed toward the end of full-time employment. When a CFO with a career that spans over 30 years tells me he’d like to find a public company board seat, my first thought usually is, “Brother, if you’ve just started planning for this now, it’s not going to happen.” I’m not saying this to be ageist; the boardroom really is one of the places in corporate America where experience truly is valued (both explicitly and behind closed doors). What I am saying is that if you haven’t been actively positioning yourself for a board seat by that point in your career, then you most likely won’t have a chance to be considered for this rare career opportunity.

And the opportunity is indeed rare. There are fewer than 4,000 U.S. companies listed by the New York Stock Exchange or Nasdaq. Each one of those has an average of 9.2 board members. If we say that 1.5 of those are inside directors, then the total number of seats available for outside directors is approximately 30,800. On top of that, most of these companies do not have term limits for their board members. Of the S&P 500, only 16 have term limits, and the average tenure of a director in an S&P 500 company is eight years. That means in any year, around 480 S&P 500 board seats become available.

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Within the S&P 500, about 15% of board seats are held by current or retired CFOs. So, we are looking at approximately 70 board openings on a yearly basis that will most likely be filled by a CFO. To give you a comparison, that is slightly more (70 to 61) than the number of new players that entered the NBA last year, so your odds are almost as good as getting on the roster of the Lakers or Bulls as they are for making it onto a S&P 500 board.

But, my friends, all is not lost. There are things you can do to improve your chances of earning a spot on a public company board:

Raise Your Profile: Speaking at a conference or writing an article automatically raises your visibility and positions you as a thought leader. This strategy is particularly effective in increasing awareness of your personal brand with professionals in the executive search business. Research teams in big search firms often begin a board search by scanning for subject matter experts in professional associations or in publications like Does it work? Well, you’re reading this aren’t you?

Network, Network, Network: Boardrooms are still more than a little clubby. Many board seats are filled by the “who do you know” search strategy, where one director asks another if he or she has any suggestions on candidates for an opening for another company on whose board first director serves. Networking with executives who already serve as corporate directors is always a useful exercise to help you gain an understanding of how to market yourself and expand your professional contact base.

Know Your Differentiator: What is it about your career that sets you apart from the rest of the board candidate pool? Are you a master at mergers and acquisitions? Have you opened up the market in China for your current company? Are you a mad scientist when it comes to creating a tax-advantaged legal entity structure? Whatever that differentiator may be, make sure you understand it and that you can clearly articulate the value this strength would bring to a company’s board. In addition, target the types of companies that play to your strengths — i.e., if you’ve only been CFO of U.S.-focused service companies, you are wasting your time targeting global manufacturers.

You Don’t Have to Play in the NBA: There are plenty of fulfilling opportunities outside of public company board seats. For example, serving on a private company board will significantly open up the number of opportunities for which a CFO may be considered. These roles can often be used as a springboard to a public company board seat and don’t come with the same liability concerns that a CFO faces on a public company board. In terms of targeting these types of roles, it has been my experience that industry knowledge is much more important.

In the end, it is all about being realistic. Given the types of companies you have led in terms of size, ownership, industry, etc., where do you believe you will have the most appeal? Once you have defined that realistic objective, set your search strategy to achieve that goal. The audience of networking contacts, functional peers and search professionals with whom you will interact will benefit from your targeted approach and your ability to direct them to the types of companies where you can have the greatest positive impact.

However, I will go back to my original statement: if you are 30 years into your career and the board role has not yet presented itself to you, it most likely never will. Rather than embark on a frustrating process that will probably not end with you sitting in a director’s chair, make that fearless self-assessment now and direct your energies to endeavors where your wealth of skills and experience will be truly valued.

John Touey is a principal at executive search firm Salveson Stetson Group with 20 years of experience providing executive search, human resources and management consulting services to organizations in the healthcare, financial services, utilities, manufacturing and pharmaceutical industries. Follow him @JohnTouey.

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