Boards have gained a lot of visibility recently, notably because of changes in governance rules and a progressive professionalization of the Board Member role. Many successful line managers want to become Board Members in the second part of their career and more and more institutes offer training or certifications for aspiring Board Members. But what are the chances of getting appointed to a Board for a line manager without previous Board experience? And how to get there? We have asked Titti Hammarling, Global Head Board Services and EVP EMEA at AIMS International for her advice.
1. Where do I start if I want to become a Board Member?
Titti Hammarling: The business challenges of today require qualified and experienced board directors. We have different corporate governance models in different countries. Therefore, you should make sure to know the country specific regulations for board work and to have the knowledge about good board practice. Make up a plan for what you want to achieve and build your competence and experience in line with that. Let people know about your ambitions and what kind of target companies and board roles you are aiming for. There are both physical and online board-recruitment networks. Send your CV to Executive Search firms dealing with board recruitments.
2. What are the qualifications needed to serve on a board?
There may be very different needs because companies are of such different types and sizes and with different challenges. They are also at different stages of development. Board member roles have also changed dramatically. Regardless of sizes and sectors, understanding the context in question and to see the big picture are crucial things – that is to understand the company’s strategy, business, leadership and culture. A successful board member should also have integrity and an independent mindset to focus on growth and commitment and have the courage to challenge poor ideas and decisions.
One needs to have relevant knowledge of corporate governance and of what board work means and to make sure one’s possible contribution is in line with the company’s requirements. In addition, I think that one also should be on the board to serve all the owners and the company, not to do it for personal gain. Then – to be constructive and good at relationships, succession planning and teamwork. One also needs to have the time and engagement that it takes.
So, it is the matching between the needs of the board and the overall ability, experience and personality at individual level that determines a person’s suitability. It is important to have financial understanding and business acumen. Often it may also be important to contribute with a specific profile, as being innovative, experienced in risk management, and so forth.
3. Which profiles are the most sought after?
Very experienced board members are always sought after, just as well as board members that have a reputation to perform well. Now there is also a demand of more diverse board candidates as well as of specific profiles strong at post pandemic ways of working, ESG, sustainability, artificial intelligence and digitalization. It is overall highly valued to have CEO, CFO or other high-level experience. International experience is sought after. Founding and running successful startups may also be attractive experiences.
4. What are the different roles within a Board?
This depends on what kind of board we are talking about and where in the world. There are different regulations and these dictates how the Board should be structured. The Nomination Committee is of great importance in the composition of a board. The Board shall consist of persons with different profiles, skills and professions as well as diversity in gender, age, and ethnicity in order to be able to carry out the optimal board work. Common roles are Chairman, Vice-Chairman, Secretary, and Board Directors.
5. How are Board Members recruited and how to position oneself for such a role? What are the difficulties?
It is a long term work to become a board professional. It is a recommendation to start with smaller companies if one is new to board work.
Listed companies have nomination committees that propose new members to a board and in these cases, competition is tough and demands on experience and/or specific competence high. Private companies have another situation. Maybe they are looking for professionalization and look for their first external member or chair or it is a smaller mixed board where it may be easier to step in and contribute.
6. How can you build your Board Resume?
As with everything when you want to become successful – think long term and take it step by step. Learn about board duties and roles. It is often good to start in boards of small businesses. Focus on what you can contribute with in the boardroom. Note your experiences of importance.
7. How to prepare for a Board interview?
Be well informed about the company and how the current board works. Make sure you get to know their future needs and what you can and want to contribute. Listen, be consultative and have a focus on the company, not only on presenting yourself.
8. What are the rewards and compensation of a Board Member?
The main reward beside the financial compensation is the assignment itself – to be a sustainable leader and part of the strategic interest and decision making of the company. It is also rewarding to be a board professional advancing in the career.
The compensation varies from country to country and from company to company, from almost nothing to top levels. There is most often an annual fee, for some companies also a performance-based part and a possible shareholding.
9. What are the risks?
One meets many kinds of risks – financial and liable. There is also a risk that a board or a board member is not strong enough to guide the company in development, transformation, and disruption. Another risk is that the board cannot work as a team or that they spend time on wrong issues or conflicts.
10. Is there a secret to becoming a great Board member when you have been an executive all your life?
I think it is important to understand the difference between an executive and non-executive role, not to just see a board position as a next step but to prepare for the major career shift that it is.
Thank you Titti Hammarling!
Titti Hammarling, AIMS International Sweden, EVP EMEA & Head of AIMS International Board Services Practice
Titti has been active in Executive Search since the early 1990s, mostly in an international context. She is a certified psychologist specialising in group and individual development. Titti has broad experience from different industries and the key themes of her assignments are growth and change leadership.