If you’re an up-and-coming director, one of the top items on your to do list should be finding a search firm with which you have a good fit. But it can be daunting knowing which firms to contact, what they’re looking for and exactly what you can expect when you sign up with one. Here’s a guide to getting to the top of the ever-growing line of new directors knocking on search firms’ doors.
Katie Lahey AM MAICD is the executive chairman of top search firm Korn Ferry. She says even before identifying the search firm, emerging directors need to do a self-appraisal and have a clear idea of the value they bring to a board.
“They need to go through that self appraisal, because the first question a search consultant will ask is: ‘What value do you bring to the board? Have you done the Australian Institute of Company Directors’ (AICD) Company Directors Course? What’s your financial and management experience and strategic skills? What’s your knowledge of current governance practices?’ They’re the basic questions a search consultant would ask.
“It’s really good if the emerging director has already answered those questions before they get in front of the search consultant,” she advises.
The next step is to choose the right firm. There are large ones such as Korn Ferry and boutique operators as well. The big five – Korn Ferry, Spencer Stuart, Egon Zehnder, Heidrick & Struggles and Russell Reynolds Associates – generally look after the boards of the top 200 companies.
The boutiques typically look after the mid-market and specialist businesses. An example is MitchelLake, which focuses on technology roles. As a newcomer, it is advisable to see every search firm that’s prepared to see you in order to expand your network as widely as possible.
Lahey says Korn Ferry is emailed about 300 unsolicited resumes each week. She says the best way to get cut-through is to make sure your resume is as easy to read as possible.
“The other approach is to find someone you already know, and that you can talk to, at the search firm. Or you might know someone who can introduce you to the firm. We get hundreds of resumes every week and we can’t see everybody. Sometimes it’s best to find a way in, other than by sending a resume by email.”
She says it’s essential to have a pithy, focused resume so search firm consultants can quickly determine the quality of the candidate. Korn Ferry will notify applicants if they have been added to the firm’s database of candidates.
Some search companies hold lunch or breakfast meet-ups for up-and-coming directors to help build their knowledge and understanding of the path to securing a board seat. Lahey believes it’s always a good idea to accept invitations to any such events as they are networking opportunities. “Don’t just rely on a search consultant, you need to do a lot of legwork yourself.”
Her advice is to view getting a board seat as you would any other project. “Look at your network and who is already on a board for connections to other directors. Spread your net as wide as you can. Don’t be single city focused. If you live in Sydney, spend a couple of days a month in Melbourne talking to your contacts, or vice versa. People become focused on their own city, but board work runs across the whole country. Directors need to be able to travel.”
Lahey urges new directors to consider looking for opportunities on government and not-for-profit (NFP) boards initially. “Don’t just focus on the top of the tree, because you could be waiting a long time to secure a role. You could get very valuable experience on a government or NFP board that could be applied to a bigger company down the track.”
Denise Morton GAICD is a non-executive director and governance consultant who has had exposure to many boards, ranging from ASX companies to NFP boards, as well as university councils and government-owned corporations. She’s also chair of the YWCA Queensland and has extensive workplace health and safety experience.
Morton, who has used and continues to use search firms agrees the best way to get on a good search firm’s books is through a referral from an existing candidate of the firm.
“A good way to find out if a search firm is right for you is to check its website and principals, and their LinkedIn pages to see who they’re connected to, to find out more about them and whether they have actually placed directors recently.” Morton says gaining access to the search firm’s network is important and that to do so you need to be involved in its events.
She also advises focusing on a particular industry, although certain skills such as the ability to read financial statements and ask probing questions translate across many industry sectors. “Don’t let lack of industry knowledge be a barrier, but think about what your value proposition is to the search firm.”
Morton says it’s important that there is alignment between the search firm and the candidate as to what constitutes success. This is particularly important if the search firm charges an upfront joining fee.
“Understand what you get for this fee; it would actually be good to have a fee structure based on results rather than a flat fee. But I can understand why search firms are structured the way they are.”
For most directors, the starting point will be deciding on the type of board on which they would like to sit.
“The boardroom is changing enormously. Some directors might add value across more traditional legal, finance, risk or corporate governance skills. Other directors will add value around the customer journey and experience perspective, as a strategic marketer or digital adviser. And some will be able to contribute technology advice,” says Warwick Peel, the CEO of Startup Boardroom, which provides advice to boards of early stage ventures.
Peel says the idea is to identify the specific type of board roles you want to go for and select search firms that are aligned to those areas. He says it’s also a good idea to follow the protocols of the past.
“The way the more experienced baby boomer generation has always done business is to build relationships and use the phone. Think about going back to old school methodologies like writing a letter because sending an email and going through the traditional application process when the competition is in the hundreds is not the best approach,” he says.
Peel reiterates that securing a board position involves proactively looking for opportunities and being really clear in your CV about your value proposition as a director.
He says when he recently built the board for a company in the HR technology industry, people with a compelling value proposition that showed their expertise in delivering business growth had a distinct advantage. “We had more than 100 applicants and a concise value proposition, coupled with a follow-up call, was the difference in getting an interview.”
If you do get your foot in the door with a search firm, follow up every fortnight or so with a phone call to your assigned consultant. “I would always advise a phone call over an email because you’ve got to stand out from the crowd. Everyone has hundreds of unopened emails, so go direct. Try to have a coffee meeting if you can, really build those relationships.”
Peel says it’s a balance between being patient and persistent. “The journey to the right board role is going to take three months at the very least, if not six to twelve months.”
He says standing out from the crowd is about being able to identify the big challenges facing boardrooms and businesses, such as cyber-risk. In an environment where there’s emphasis on companies collaborating on innovation, digital strategy, digital governance and disruption, there are great opportunities for directors who can help steer companies through these challenges.
“Culture is another big challenge for boards. If you can help steer the thinking on intergenerational human capital transfer you are likely to be highly valued. It’s all about being able to identify the big trends and challenges for boards and positioning yourself to solve those problems.”
A long game
Experience in business can be a valuable asset and governance qualifications will stand you in good stead. That said, many directors have come – and increasingly are coming – to board roles from a variety of professional backgrounds.
Whether it is the board of a private business, a government organisation, a listed company or an NFP, the process of securing a seat in the boardroom is frequently challenging.
To that end, being open to a variety of positions is sensible. You could consider taking on an unpaid position that will provide invaluable experience that will help you take your next steps.
A good search firm should help you identify your strengths and introduce you to a board that will benefit from your skills. For instance, many businesses are looking for directors with expertise across the digital economy and board opportunities are opening up for people with this experience.
A career in the boardroom is a marathon, not a sprint. Be persistent and keep building your knowledge and networks that will help you establish a portfolio of quality directorships over the long term.
How to get a board position
Complete appropriate education with the AICD.
Demonstrate your value to a board, whether that be strategic, financial or technological, or anything in between.
Start out looking for positions on not-for-profit or government boards before transitioning to boards of larger businesses.
Getting started: Advice for emerging directors
- Before identifying a search firm, emerging directors should do a self-appraisal and have a clear idea of the value they bring to a board.
- Choose the right search firm. As a newcomer, it is advisable to see every search firm that’s prepared to see you in order to expand your network as widely as possible.
- Make sure your resume is as easy as possible to read. It’s essential to have a pithy, focused resume so search firm consultants can quickly see the quality of the candidate.
- Look at your network and consider whether you might know someone who can introduce you to someone at the search firm.
- Don’t just rely on a search consultant; you need to do a lot of legwork yourself.