Monday November 24, 2014

Securing Your First Public Company Board Seat: Mission Possible

New and seasoned directors met recently to discuss best practices and share experiences.

Michele Dunn, like many experienced executives, would welcome the chance to serve on a public company board. The problem is, no one has invited her yet. That’s a gap that she, like many aspiring directors, want to close. As a business consultant, she has trained 10,000 mid-level managers at companies including Ford, PepsiCo and Merck. She has been a master instructor at GE’s Crotonville Leadership Development Center since 1986. Her philosophy is that “culture can eat strategy for lunch.” What she means by this is that the success of a company’s strategic plan lives or dies in the corporate culture. And no matter how carefully governed a company is from the top, management should focus on culture in the middle, where she contends recent corporate tragedies like BP have occurred.

“I have a passion for great management. I want business to behave responsibly. I want corporations to be proud of themselves, what they do and how they do it. Boards need new perspectives and more people with different perspectives. I believe that my perspective is too often absent in the boardroom. I have a deep understanding of how the core of a corporation functions. And I believe if directors don’t know what’s happening in the middle of an organization, they don’t really know what’s happening at all.” Directors, Dunn says, need to listen to the “melody of the middle” as much as employees listen to the “tone at the top.”

Dunn currently serves on the board of Easter Seals in Connecticut where she lends her 30 years of experience to the non-profit sector. Even though she has not been a CEO, she understands their challenges because she has coached and trained generations of them. Though not a CPA, she has scrutinized balance sheets and assessed financial performance. And while not a lawyer, she has counseled managers who are confronting the immediacy of compliance issues in the field. Her profile is at present unconventional for nominating committees, but she is determined to find new avenues for her experience that lead to the boardroom.

More stories in The Boardroom Guide for New Directors:
Directors Registry Now Exceeds 4,000 Listings
A Performance in Three Acts
A Dodd-Frank Cheat Sheet for New Directors

To help Dunn prepare for her desired role as a director, NACD Directorship invited her to join a gathering of new and seasoned directors to share their experiences and discuss best practices for newly appointed board members. The ground rules for the conversation that ensued were simple: we wanted the new or aspiring directors to ask their more seasoned counterparts how to get to the boardroom—and how to succeed there upon arrival. Questions around the table included: How did you land your first directorship? What questions should a new director ask of company management and fellow directors when first coming on board? What about culture? Pay? Finally, how will responsibilities match the value a candidate has to contribute?

Breaking In…With Class
How to get your first, second and third board seats? Network. Network. Network.

Directors come to board service in a variety of ways—and for a variety of reasons. The population of directors available for board seats can be pretty much divided into two camps: the C-suite executive who seeks personal development with an eye toward moving up to become chief executive or business executives looking to embark on a second career after a successful and rewarding first career.

Michele Dunn

Most directors and their professional advisors acknowledge that the first board seat is both the hardest to obtain and most important. According to Thomas J. Presby—who chairs the audit committees of five public-company boards— your first board seat helps establish your credibility and should play an important part in the expansion of your board network. Looking for a directorship should be approached with the same vigor and rigor as a job search. “It’s a job, not a hobby,” he says. Presby goes so far as to recommend writing to the chair of a nominating and governance committee stating your case for why that company board specifically aligns with your skills and experience.

Allen F. Freedman was named to his first public directorship in 1980 when a company he had invested in went public. Freedman remained on that board for more than 30 years, served on other boards and founded the Association of Audit Committee members.

A professional colleague recommended Lou Lipschitz to his first public-company board seat shortly after he retired from Toys “R” Us in 2004. Now the audit committee chair for The Children’s Place Retail Stores, New York & Co. and Majesco Entertainment Co., and the compensation committee chair for Forward Industries, Lipschitz was the CFO of the toy retailer as it grew from operating 300 stores with annual revenues of less than $2 billion into to a worldwide retailer with more than 1,600 stores and revenues of $11 billion before he retired in 2004.

With more than 23 years of sales, marketing and operations experience at Kellogg, Alan F. Harris agreed to join the board of his first public company board shortly after retiring in 2007. Heidrick & Struggles was retained to lead the search for an independent director by Lancaster Colony, a Nasdaq-listed company that manufactures and distributes specialty foods, glassware and candles; Fulton was the partner in charge and aware of Harris’ relevant marketing, sales and operation experience along with his desire to serve. Harris, who now calls both North Carolina and South Africa home, says public-company board service gives him the opportunity to stay involved in business after nearly 30 years at Kellogg: “I am still fascinated and motivated by business, and you don’t simply switch into the off position when you retire.”

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Comments on “Securing Your First Public Company Board Seat: Mission Possible”

  • Kurt Swartz says:

    I have been a Vice President of TD Waterhouse, a Fortune 500 company for 20 years, which I helped to remold into the new TD Waterhouse. I am an expert in process improvement, cost cutting, and team building. In addition I used technology to bring the Brokerage business into the 21 Cenury through Scanning & Imagin. The team I worked with wrote the book and then we built it. Then we patented it! We reached year 5 savings in year ONE…. After reviewing the ROI discrepency. I had come to find that ALL internal calls initiated through normal telephone traffic stopped at the point of pick up rather than an internal transfer. Yes internal calls/transfers take tim,e cost money, and negatively impact productivity! Internal calls can cost a fortune as it was discovered during this exercise. I love to create things and make things better. Master Tweaker!

  • Jim Johnston says:

    Clearly communicating credibility and a governance skill to the appropriate board member can be most productive. There is a huge shortage of capable board members.

  • Kimble Lewis says:

    Board of directorship should be selective. Board members have a fiduciary responsibility to multiple stakeholders. Board diversity is very important. Effective boards are not just diversified by race and sex, but they comprise diversity in competency, perspective, and experience among its membership that, oftentimes, truly occurs when the board reflects women of multiple races and persuasions and men of multiple races and persuasions. In today’s business world, public companies that embrace board diversity really improve their ability to win comparative and competitive advantage. For this reason, I am leading efforts to secure board directorship. I have a paradox of diverse yet specific functional expertise in sales leadership, lean six sigma, corporate development and strategy, brand marketing, omni-channel strategy, technology strategy, and coaching. With my functional expertise, deep financial service industry knowledge, and leadership experience, I know when to flex the appropriate capability to achieve the desired outcome, leading the development of a culture and climate that invests concurrently in people development and remarkable performance.

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