Today’s boardrooms look less and less like the boardrooms of the past few decades. Boards are increasingly visible to their organizations, stakeholders, and the public. There are high standards for how boards uphold their fiduciary responsibility today and contribute to a future-proof organization for tomorrow.
Board accountability is in the spotlight, and diversity in the boardroom is more than just a buzzword. This means that when nominating new Board Directors, every new placement matters because they have the potential to weigh heavily on board effectiveness.
Board recruitment is virtually nothing like hiring for your average role vacancy. That’s because these impactful placements can shift the tides of overall board composition and ultimately future-proof the organization. With that in mind, board recruitment should be approached from the angle of purpose-driven leadership, which can drive organizations to nominate Board Directors who bring new skills and experiences to strengthen the board’s overall composition.
Why Is Leading With Purpose Important to Board Recruitment?
Why is leading with purpose essential to board recruitment, and how does it make a difference in the organization? What’s happening inside today’s boardrooms is critical to an organization’s outcome and ability to realize future goals and survive in potentially volatile environments.
Recent uncertain economic conditions have many CEOs worrying about an economic slowdown (or worse), with one executive saying that his company is “highly concerned and humbled by the environment.” Organizations today need to think with the future in mind, and leaders must make decisions that ensure longevity. That’s where purpose-driven board recruitment comes into play.
Purpose-driven board recruitment uses rigorous processes not just to find “any” strong board candidate but to look at the precise composition and experience of the board in question and find areas where a new Board Director can be additive through value, expertise, purpose alignment, and perspective.
Who Is Responsible for Board Recruitment?
In the past, board recruitment typically might have been done primarily through a “word of mouth” fashion. The search was executed internally, relying on who Board Directors or the corporate secretary knew on an individual level.
But authentic purpose-driven board recruitment requires an external body to conduct a thorough and comprehensive evaluation. Executive recruiting firms specializing in new board recruitment deploy an approach that generates transparency in the process for both potential candidates and the other board, enabling them to ultimately select a candidate that is more impactful and adds greater contributions to the collective performance of the organization. There is often a significant missed opportunity to align the conviction and passion for the organization’s purpose at the Board level.
How Do You Recruit a Purpose-Driven Board of Directors?
Purpose-driven board recruitment requires an upfront investment by the Board of Directors to articulate that vision succinctly and thoughtfully to a recruitment partner at the outset.
We go into more detail below.
Step 1: Discovery and Synthesis
Kicking things off, discovery and synthesis are far different in the board recruitment experience than it is with a typical recruitment or placement process. During discovery, your board recruitment partner firm will work vigorously to deeply understand the current board’s composition and identify precisely what experience each member brings to the table. After that, the partner firm will provide recommendations for potential board candidates that will strengthen the board and make it more impactful in the long run.
Here at N2Growth, our highly experienced executive recruiting partners interview Board Directors, typically including the nominating board development committee members, the chair of the board, and the CEO. We use this interview process to understand each individual’s experiences in the boardroom and to further strengthen the candidate profile through recommendations.
Step 2: Candidate Development
In the second step, candidates are continuously sourced until the search is closed. Of course, board recruitment candidates with the proper qualifications and skill requirements for the position are identified, but that’s just the beginning. A qualified executive recruiting firm will look beyond the qualifications and skills requirements to match candidates who are culturally and skillfully additive to the board but who might have been otherwise difficult to identify.
For example, boards have typically considered previous board experience a prerequisite for a candidate. But often missed are candidates that can help elevate the board and the organization to its desired future state, simply due to a narrow qualification of not previously serving on a board. Fill that gap of experience with a board mentor or coach.
As part of our executive search strategy, we use a two-step interview phase to qualify candidates before introducing them to our partners. The first interview revolves around understanding a candidate’s skills and experiences, while the second is a competency interview.
These two interviews ultimately build a complete view of the whole candidate. We also present new candidates to our clients bi-weekly.
Step 3: Client Interviews
After identifying candidates, the next step is an introduction to qualified candidates for the initial interview stage. This is typically a collaborative process, where organizations are supported by their executive recruiting partner to craft a beneficial interview experience. For example, N2Growth uses dialogue and feedback from interviews to shape further candidates and sourcing while supporting active candidates.
Step 4: Assessment and Evaluation With Candidates
A key component of effective board recruitment is the assessment and evaluation stage, which is handled differently by executive recruiting firms. At N2Growth, we greatly support your evaluation of board candidates through assessments, debriefs, and extensive verifications, including on social media and checks for finalist candidates.
Step 5: Supporting Documents for the Board Ratification
In the final step of new board recruitment, we prepare materials to support the board ratification process. This involves preparing documents for a formal vote on the new Board Director, including supplemental materials for AGMs and final shareholder approval. Additionally, we help present the terms of the board engagement, including board fees and equity. Finalizing this stage not only ensures that the Board Director is appointed but also that there are no surprises when it comes to the expectations and obligations of the new Board Director.
Positive Expectations From a Well-Placed Board Director
Well-placed board of directors can create a lasting impact on the board itself and the organization as a whole. Here are some positive expectations from a finely tuned board recruitment experience that leads to a well-placed Board Director
Maximized Board Effectiveness
The first and perhaps more impressive positive result of a well-placed Board Director is maximized board effectiveness. When each Board Director is placed based on the current board’s precise needs and profile, the board can realize its full potential. New members contribute leaps and bounds to composition and
ensure that the board is best able to serve its organization and shareholders.
Future-Proofing the Organization
It is not enough for an organization to be successful today; instead, it needs to be resilient in the face of whatever comes in the future. With that in mind, well-placed Board Directors have the power to future-proof the organization, adding skills, competencies, and perspectives that can help the board make the best decisions possible for the future.
Full Coverage of Experiences
It takes outside perspective, in-depth analysis, and rigorous evaluation to understand where a current board’s strengths lie and what each member brings to the table. But through this process, Board Directors who add skills and experience to the board where it’s most needed can be placed. This ensures that all areas are effectively covered, and there are no areas where experience is lacking.
Consequences to Avoid by Choosing the Wrong Candidate
While a well-placed Board Director can lead to many benefits, choosing the wrong candidate can lead to long-lasting consequences that have a ripple effect throughout the organization. They are as follows.
Unable to Deliver Effective Results
When the wrong qualified candidates are brought onto a board, they can significantly hinder the board’s ability to maximize its effectiveness and best perform its duties. Unsuitable candidates can weigh down a board by making the decision-making process more difficult and challenging for members to work together cohesively.
Ill-Prepared for Instability
While we’ve discussed how well-placed Board Directors contribute to a future-proof organization that is best prepared for potential instability, the inverse is true: wrong candidates can leave organizations ill-prepared for emergencies and unpredictable scenarios.
Experiential Weaknesses
When board composition is not considered when placing members, there can be detrimental gaps in experiences and background. This can lead to a board with blind spots and shortcomings.
How Do Companies Find the Right Board Directors?
Finding the right Board Directors is critical to an organization’s future success because a board’s composition determines if it can effectively perform its duties. In order to find these additive Board Directors, decision-makers need to ensure a rigorous candidate process is in place to nominate members who maximize effectiveness and allow the board to be best prepared for tomorrow’s challenges. Organizations can partner with a world-class executive recruiting firm with a wealth of experience in managing board relations, like us here at N2Growth.
N2Growth understands how to secure purpose-driven board candidates and works tirelessly as your strategic partner to identify those who will benefit your organization. Our strategic and research-backed board-level search ensures that impactful insights are at a partner’s fingertips and that recommendations are made based on where current opportunities lie and where maximum value can be added.
Secure your next board leadership position with a purpose-driven mindset by partnering with N2Growth.
