The Incoherent Way We “Hire” Directors

Republished here with permission, Ralph Ward’s essay was included in his January 2, 2012 publication: Ralph Ward’s Boardroom INSIDER, the best quick read for director tips. In a few brief paragraph’s Ward sets out the folly of our current selection process. After reading it, I hope you will agree with me that current practices are unsustainable. 

The hiring and promotion process at the top of a major company by definition is based on focusing talent needs to the narrowest of points. There are only so many “C” level positions, and any company will obsess over finding the top talent, the best fit, the greatest leadership potential. Grooming internal candidates, setting up a succession “horse race,” nurturing skills, and recruiting (and retaining) high-potentials are key tasks for any executive team. When hiring from the outside for a top position, the standards are even tougher. Background, credentials, achievements, and skills are closely examined and weighed. All involved realize that selection of a top C-level talent (especially the CEO) is a decision made for high (possibly “bet the company”) stakes.

But another top level role at the is chosen very differently. These talents are actually at the very tip of the corporate spear, the ones who hire and fire the CEO — the board of directors. But their selection typically involves no aptitude testing, no job descriptions, and no outside certification. Going through a search firm to find qualified board candidates remains rare — most directors, even at the Fortune 500 level, are still recruited through a “who knows who” network. When specific skills are sought (such as finance background), qualification is often based on title, such as being a CFO or former audit firm partner, rather than any specific achievements. “Interviewing” a board prospect in any conventional hiring aspect is uncommon, and multiple rounds of interviews within the company even less so.

In short, those who hold the corporation’s most powerful office are picked through its most amateurish, opaque, subjective selection process. At least the guy you hire as janitor has to pass a drug test. This is another of the contradictions we face with the corporate board model, expecting this part-time group to serve as both mentor and monitor, objective auditor and subjective booster. But what other corporate position has such an incoherent hiring process?


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