It was a pleasure and honor to participate as a panelist for the Private Directors Association Charlotte Chapter Webinar entitled:
Different Strokes for Different Folks? Best Practices for Boards in Public, Private, and Nonprofit Organizations.
The webinar was moderated by Susan Jamison, Owner, Wealth Matters, LLC. My distinguished director colleagues were Dorlisa Flur, CEO of Flur Advisory and an experienced board member, and Louis Foreman, Founder and CEO, Enventys.
It was an instructive session given the unique experiences and different perspectives among the moderator and panelists.
This summary focuses on the necessary skills needed for board candidates desiring to serve on for-profit and/or nonprofit companies, suggestions for how to find nonprofit board opportunities, and some words of wisdom.
Desired Board Skills
When it comes to desired board skills, I believe they fall into four separate categories as follows: always in-demand skills, subject matter skills, soft skills, and other skills. It’s important that board candidates ensure they possess a combination of these prerequisite skills.
Always in-Demand Skills
These are the big picture executive leadership skills that are universally in demand by most boards when they are seeking new directors. They include:
· Experience as a current or former CEO. They possess keen operational and financial skills, such as mastery of financial statements. And they know firsthand how business works and the functions and processes that make it work.
· Experience as a C-Suite Executive — COO, CFO, CMO, CAO, CHRO, CIO — to name a few. Or as a President or Division President of a large business as these roles typically have P&L responsibility.
· The ability and desire to serve on and/or chair an Audit Committee.
· Deep knowledge of corporate governance.
· Experience setting executive compensation.
· CEO succession planning experience.
Subject Matter Skills
These are the skills that boards pursue when such skills are mission-critical to the company. Some examples include board candidates who have:
· Financial expertise and are designated as a Qualified Financial Expert (QFE) — both the SEC & Nasdaq have specific definitions.
· General technology experience especially in digital acceleration and transformation or cybersecurity experience.
· Risk management expertise.
· International experience, either by having lived and worked overseas or by working for a large global organization.
· Customer loyalty and retention expertise.
Soft skills are the interpersonal attributes related to how you work with and relate to others, also known as people skills. They include your personality, attitude, flexibility, motivation, and emotional intelligence. Soft skills are important because effective Board members must respectfully challenge and be engaged skeptics while still being able to reach consensus through compromise.
These are skills that are the most needed but often the least named qualities of an effective board member.
· Candor — being frank, open, and sincere is critical to effective deliberations.
· Collaboration — without a collaborative approach, a group of talented directors may fail to realize their collective potential.
· Courage — directors should be willing to challenge the status quo and not be afraid to speak up or offer advice that runs counter to consensus or conventional wisdom.
· Humor — good governance needs a balance between the seriously formal and a more relaxed approach encouraging directors to not take themselves too seriously and be willing to laugh at themselves.
· Inquisitiveness — being curious and asking the right questions is extremely important as it can deepen engagement, intensify observation among board members, add diverse and better-informed perspectives to discussions, and increase individual director fulfillment.
The bottom line is that Board directors must provide company oversight, insight, and foresight, not daily management. An effective Board of Directors needs to become greater than the sum of its parts.
Are the skills needed for board service different for nonprofits?
Nonprofit organizations come in many shapes and sizes. Some are large and complex such as Blue Cross Blue Shield and operate as a for-profit organization including paying for board service. In these instances, the director qualifications are almost identical to the ones we previously mentioned.
Others may be foundations or serve just a group of members such as a fraternal organization. Regardless of the nonprofit’s mission or structure, I have noticed a recent trend whereby many are beginning to adopt governance practices like those of for-profit entities when it comes to board member identification and selection. At Wrestle Like A Girl, we have developed a director skills matrix to help identify skill strengths and determine skill set opportunities or competency gaps when considering selecting a new director.
When I compare these skills set requirements with those from my public company board, some of the main differences are that nonprofit boards often desire directors who have the money and time to devote to advancing the mission. Ideally, they have experience in fundraising or establishing and cultivating corporate sponsorships and securing grants. And, having previously worked as a senior leader actively managing or overseeing a philanthropic endeavor is also extremely helpful.
If the nonprofit is a membership organization, the board would most likely want a director with prior experience developing unique programs and experience creating member value. This will help drive member recruitment, engagement, and retention.
Board candidates must realistically evaluate their skills and areas of opportunity or gaps and then develop a plan that can help them attain the needed skills.
Finding Nonprofit Board Opportunities
Joining a nonprofit board is an excellent way to enhance your skills and make valuable connections that could lead to other for-profit board opportunities.
But where do you start?
Some helpful suggestions are as follows:
· Consider reaching out to your alma mater as they are often looking for volunteers for various advisory boards.
· Consider joining an industry association board or a homeowner’s association board in your local community.
· Consider using LinkedIn to help identify colleagues and friends serving on nonprofit boards that are of interest to you and speak with them about how best to volunteer.
· And speaking of volunteering, I recommend you consider serving on a nonprofit committee or taskforce first as it’s an excellent way for both you, as a potential board candidate, and the nonprofit to see if there’s a “good fit”.
Lastly, I would strongly encourage that you put your money, time, and creativity toward things that matter to you so only volunteer for a nonprofit with a mission that you are passionate about.
Words of Wisdom
Do not wait until you are retired to search for your first for-profit board. It’s much easier starting the board networking and search process while you are still a senior operating executive. You’ll have numerous opportunities to cultivate other executive leadership and search firm connections. Plus, you’re already known and an established identity in your field. And do not forget to inform your CEO of your interest in serving and enrolling him/her in your board search process. They often have valuable connections that they can tap into on your behalf and they are often asked for candidate recommendations.