What’s happening inside the Boardroom has never been more crucial to business outcomes and more visible to interested parties. In today’s uncertain economic conditions and fierce market competition, everyone from shareholders to regulators closely monitor how boards perform and if board members are upholding their fiduciary duty.
Because of these factors, board governance continues to be critical for overall business success today. But for boards to excel in a way that encourages business performance, agility, and innovation, Board Directors need to understand the levers they can pull to be more impactful and make a greater contribution to the overall effectiveness of the Board or Chairs need to make changes in the Boardroom.
This all means that each individual Director on a Board profoundly matters, and every Board Director has the potential to bring unique strengths, innovative insights, and powerful perspectives to the table, ultimately bringing governance to life and driving lasting results. But the paradox is that boards might not be the most effective bodies to assess their current strengths and weaknesses or be the right group to drive a rigorous candidate search if an area of the Board can be bolstered with the appointment of a new director.
To accurately assess the state of a board, evaluate its current performance, and identify world-class Board Directors who add value to the business, an outside perspective is necessary in the form of executive search firms with robust experience in board-level placements.
How a Board-Level Search May Impact Governance
Board-level searches can deeply impact board governance for the better if this search is conducted effectively, precisely, rigorously, and, more importantly, with the right stakeholder alignment at the outset. But there are historical issues with the board-level search that can inhibit a board’s governance abilities.
Traditionally, the board-level search has been led internally by members of the existing board leadership who have relied on who they or the corporate secretary know individually. They have mostly considered qualified candidates with previous board experience exclusively. This vastly shrinks the potential pool of executives to consider and doesn’t consider strategic board placements, which can ultimately restrict a board’s capabilities.
Proper board governance relies on the individual experience and collective contributions of each Board Director. When an experienced executive search firm conducts a board-level search, specific strategies are used to maximize reach for potential candidates and diverse leaders that go far beyond a known network and seek to bring a greater group of experiences and qualifications to the Boardroom. These strategies include analyzing a board’s current composition and conducting a heavy and rigorous search process grounded in research to identify what additional kinds of experiences can be brought forward for a Nominating Chair to consider.
Together, these aspects of an executive search at the board level mean that businesses have a very strong, effective board and profound clarity in what each individual brings to the table and how the Board works together.
Governance Issues to Consider in Your Search for Board Members
Board composition profoundly impacts board governance and effectiveness. Here are key governance issues to consider in your search for board members.
Current Board Evaluation
When conducted rigorously and effectively, the board-level search can strategically strengthen the Board, leading to a robust body that can protect and further enhance stakeholder values and interests while mitigating risks. Each board member brings specific experiences, expertise, and insight to the table.
Board placements have the opportunity to reframe and powerfully influence the composition, leading to the most effective Board possible. But for this to be the case, the board-level search needs to be conducted by first understanding the strengths and weaknesses of the current Board and determining where a new director could add the most value.
Future Board Strategy Realization
A search for a new Board Director can greatly impact board governance by improving overall performance effectiveness in the long term. The board-level search provides understanding surrounding the performance and contributions of each Director, enabling the Board to best execute its strategies and achieve its future goals. When a board-level search is research-backed and based on the current contributions of the Board Directors, then committees can search for a new director who will positively impact board strategy execution and long-term vision realization.
Appropriate and Valuable Board Diversity
Board diversity isn’t simply a buzzword in today’s Board Director search landscape because diverse thinking and representation can lead to talented executive leaders who are both technically qualified and who more accurately represent businesses themselves. In today’s business landscape, board compositions are rapidly changing.
Even in just the past two years alone, directors from underrepresented groups occupy many more boardroom seats than in previous years. In the search for new Board Directors, diverse candidates can empower boards to make better decisions for their stakeholders.
Governance Issues to Consider When Searching for a Board Chair
While the search for Board Directors is critical to board governance, the search for a Board Chair can be even more impactful in influencing how a board performs its key duties. With that in mind, here are some governance issues to consider when searching for a Board Chair.
Long-Term Board Strategy Cultivation and Execution
Board Chairs need to be able to cultivate long-term board strategies and ensure their execution. This might include nurturing a relationship with the CEO, developing relationships with stakeholders, and quickly pivoting when something simply isn’t working.
Leadership qualities and board experience alone aren’t enough when searching for a new Board Chair. Candidates must be prepared to identify long-term goals and strategies and lead the rest of the Board to success. A crucial aspect of effective corporate governance is communication, and the Chair sets the tone.
Appropriate Board Succession/Turnover
Appropriate board turnover is necessary for a healthy and powerful board and is central to longevity in outstanding board performance. Board Chairs should be able to take a critical look at the composition and encourage appropriate turnover when valuable and necessary.
Clarity on Board Director Strengths
There is immense clarity on what each Board Director brings to the table on a fully empowered board and where their strengths lie. In order to maximize the impact of these strategic placements, Board Chairs should deeply understand the contributions of each Director, leveraging these strengths to impact strategy execution positively.
Improving Governance With the Right Candidates
The search for Board Directors and Board Chairs can greatly weigh on board governance for better and worse. But because of this, the right candidates also have the potential to improve board governance vastly. First, to determine the “right” candidates for a particular board, extensive analysis and research must be conducted so candidates can be recommended based on feedback from all board members and where opportunities currently lie.
After a framework for value-additive candidates is established, purpose-driven board member candidates can be identified who bring key traits, skills, and experience to the Board that will have a positive impact on governance issues. This can include candidates with valuable experience, technical proficiency, regional expertise, in-depth sector knowledge, and experience executing specific strategies at other organizations.
Something else for consideration: the right board candidate might not be your typical board candidate. Specifically, some of the best and most impactful Board Director candidates might not have previous board experience but can still strategically strengthen a board. Set these new Directors up for success with a Board mentor.
This means that during the board candidate search experience, boards should identify and consider candidates from outside the Boardroom. These candidates are best presented and selected by experienced leading executive search firms with deep expertise in amplifying boards by helping them identify their needs, align their resources, lead in the present, and plan for the future.
Find Your Next Board Director
A board-level search is crucial because just one Board Director can provide strategic value and ensure the enterprise’s sustainability through everything from executive transitions to complex market conditions. Each board placement can positively impact governance issues, and purpose-driven board members can strategically contribute to the Board’s effectiveness.
When it comes to a board-level search that maximizes your Board’s impact and effectiveness, N2Growth understands precisely what you’re looking for. Our retained executive search firm is best known for handling highly confidential and complex Board, CEO, and C-Suite search assignments. 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 the maximum value can be added.
Contact N2Growth today, so we can start working with you as your strategic partner for identifying board candidates who are additive and value-driven for your organization.
