Toronto’s Globe & Mail ran one of the better articles I have seen on the subject (How to land a seat on a corporate board, 9/7/10). It seems the Institute of Corporate Directors has seen a 25% rise in executives enrolling in its director education program, a series of courses to prepare graduates for serving on a corporate board (see Classes & Research). The article focuses on Sarah Raiss and how she came to serve on two corporate boards.
Raiss began preparing a decade ago, serving for years on boards in schools and hospitals to get experience and contacts. She went through the ICD certification program in 2006 and was recruited two years later. The article goes on to provide advice from Korn/Ferry International on what Board’s are looking for, as well as from a study involving interviews with managers and CEOs of 42 large U.S. industrial and service firms. As kiss-up as they sound, here’s the tactics they identified that lead to success:
- Flattery as advice seeking: Congratulate an influential member about a recent success: “How were you able to close that deal so successfully?”
- Arguing, then agreeing: “At first, I didn’t see your point but it makes total sense now. You’ve convinced me.”
- Sidestream compliments: Praise an influential board member to his or her friends, hoping word gets back to them.
- Get on a wavelength: “I’m the same way. I’m with you 100 per cent.”
- Conform to opinions: Covertly learn of chairman’s opinions from his/her contacts, and then conform with their opinions in conversations with others who can influence the decision.
- Point out connections: Reference religious or political connections the individuals have in common.
Now, with proxy access, there may be another way. I’m sure taking board training, having C-suite and nonprofit board experience are still positives, but maybe a little less kissing up will be involved.
CalPERS and CalSTRS are building a database of potential directors from diverse backgrounds. “The database is a gateway to a broader universe of untapped talent, which can be overlooked as a result of a narrowly focused board profile,” according to Ashley Taylor, who is heading up the project. Individuals have already begun submitting resumes to: DiverseDirectorDatabase@calpers.ca.gov.
Another option for CalTRS and CalPERS might be to explore directors who resigned in dissent from their board. Cassandra D. Marshall’s Are Dissenting Directors Rewarded? (August 28, 2010) used a hand collected sample of 278 boardroom disputes reported in 8-K filings during 1995-2006 and showed that firms which have disputes are small, highly levered, have poor profitability, and have boards dominated by management. For all types of directors across all types of disputes, directors who resign in protest experience a net loss in board seats of 85% over the five year period following the dispute. Although the market, often driven by entrenched managers and boards, don’t reward dissent, maybe funds seeking proxy access candidates will find a gold mine of individuals with backbone.