Do you mine the collective intelligence of your board?  In today’s world, corporations are establishing processes that have an emphasis on collective wisdom for competitive advantage. This concept can be actualized at the board level through the board evaluation process. A recent study by PwC found that 63% of directors believe self-evaluations are mostly a “check the box” exercise.  This belief may be rooted in the fact that NYSE listed companies are required to conduct evaluations on an annual basis.  (See NYSE Rule 303A.09; NASDAQ does not require an annual evaluation.)  That means that a significant number of boards may be missing out on a valuable opportunity to identify issues with and improve on various board functions. A progressive board uses the evaluation process for high-level thinking in a structured, organized manner. This big picture thinking combined with an action plan moves the needle on board performance and helps to lay a foundation for continues improvement. After some of the more elemental issues that surface or tensions that arise through board evaluation are addressed, a board begins to see how strategic it is, overall. Board composition comes into sharper focus as well as director education needs. Moreover, there can be clarification of how and where improvement for strategic thinking arises. In other words, forward thinking is a result of board evaluation. This progression also involves management and management’s ability - or willingness - to tap into the board’s expertise. Board evaluation, done well, strongly undercuts the idea that boards are just rubber- stamping what management wants.

A great resource for governance professionals is an ebook, see: Board Evaluation: Creating Strategic Performance and Effectiveness ($9.99ebook Amazon, B/N, Apple iBookstore)

After an overwhelming response to my recent blog “Top 7 Challenges for Director Candidates,” I wanted to share a few more insights for director candidates. As a board consultant who does director search and offers a coaching engagement to help first-time candidates with a "directorship strategy" to gain a public company board seat, I hear from many director candidates who are experiencing the hard challenge of gaining a public company board seat. Often times I am offering words of encouragement. While I am happy to help, I also want to point out some of the “harsher” realities of what I see and hear from director candidates.

1. Entitlement. This comes across as an attitude communicating “I have worked all my life and ‘deserve’ a board seat.” Compared to other candidates, who know the days of an honorary board seat are gone, this attitude represents a failure to commit to a full-fledged initiative, to confirm assumptions on their value at a board level and to complete the due diligence necessary to be a serious candidate.

2. Locked in the past. This comes across as a lack of information about the changes in 21st century board composition and assumes that the good-old-boy system is still in place. Compared to other candidates, who have done research about board composition, there is dated belief that the tried and true has not changed.

3. Lack of strategic alignment. This comes across as a lack of having a specific board-level value proposition linked to the industry sector, company size, and current board composition. Compared to other candidates, who have a clear value proposition for a specific board, and who clearly communicate how they will add value, it has a mud-on-the-wall approach, and the candidate is unable to verbalize in a succinct statement what he or she would bring to a board.

4. Failure to communicate (reaching out and listening). This comes across as lack of a clear plan to keep in touch with important stakeholders, as well as the failure to keep track of previous board conversation high points. Compared to other candidates, who have a calendar and notes from board and stakeholder conversations, this is negligence in communication efforts and can be fatal.

Gaining a directorship means preparing for an extremely competitive environment. A director candidate had better know what sets them apart for the board seat they desire.

Over the last few years, I have heard from a number of board candidates about their biggest challenges. I have dug through my notes to share these. My hope is that the definitions and tips will bring further insights that will leverage and prioritize your time and efforts to gain a board seat.

Time

Boards move slowly. This makes keeping in touch essential for director candidates. Some become discouraged, lose momentum or completely stop networking. Those who remain consistent in their networking and communication efforts have an advantage.

A clear focus

The board world is large and mysterious. Without a well-defined board-level value proposition of what you bring to a board– one that provides focus and definition – then, time and energy is spent in a mud-on-the-wall approach and drains any sense of confidence that could be used to capitalize on potential opportunities. This is not just about having a good resume, you need to know how you can bring value, to what size company boards and in what industry.

Priorities that have impact

There is a diverse set of stakeholders that are a part of the networking to gain a board seat.  This is a complex business ecosystem in which to execute and can cause indecisiveness. Stakeholders, once defined, must be weighted for level of importance and leveraged to help you gain visibility.

Relearn

Boards are in a time of transition in defining who will be the next director. For the transformations happening now and in the future, your talents need to be closely aligned with the agendas and priorities with the boards on your target list. Build a strategic message about why you should be their next director.

Fragmentation

The market is producing a number of new ways to identify the next generation candidate. This makes it hard to know where you need to be and to stay on top of the trends. Ensure your reading and networking time gains key information in this area.

Foundational changes

There are three foundational changes needed for a 21st century director candidate: 

In a noted move towards corporate transparency, a 2011 study group of public company directors and a few academics identified seven gaps on their own boardroom turf: purpose, culture, leadership, information, advice, debate, and self-renewal. The report goes on to state boards should “develop policies and practices to ensure ongoing evaluation and education of current directors, using the services of independent third-party facilitators when needed.”

Fundamentally, a board evaluation is an opportunity for boards as a collective body to increase their effectiveness based on feedback the evaluation provides. Continuous improvement and development of board and board committee processes and procedures is key to ensuring board effectiveness. In today’s world, it is vital that a board of directors can measure its strengths and its opportunities for improvement. Board evaluation sets the foundation to purposefully identify and surmount barriers that impede effectiveness. The goal is to receive solid, actionable input. 

In addition, it is a NYSE listing requirement that boards, along with their nominating/governance, compensation, and audit committees, perform annual evaluations. NASDAQ highly recommends board evaluation. Annual board evaluations have become the norm for boards in many countries, with nearly all listed companies in Canada, France, the U.K., and the U.S. conducting some sort of evaluation each year. The practice is also widespread in Italy and Spain, and is gaining attention in many Asia-Pacific markets. Even if a company is not subject to any listing requirements, shareholders and stakeholders are asking questions and evaluating the company as though it is subject to the same requirements. Shareholders, community, and employees are expecting and even presuming the board is using an objective approach to hold themselves and the company to the “best business practices.”

Key Point: The progressive board looks for the time and resources spent on board evaluation to align with their philosophy of continuous improvement and reflective intelligence.

At the very least, a board evaluation will focus on key functions of the board, provide a “gap” analysis that draws weak areas to the surface, provide disbursement of responses, and identify the “tone” of the responses. Board evaluation is most meaningful as a productive activity for the board when it focuses on board development rather than compliance. This requires knowledge not only of board functions, roles, and responsibilities, but also how all this information links to the current business/industry trends and market changes. In addition, a dynamic board evaluation moves the board to a higher level of performance on business issues while enhancing group dynamics. Overall, a board evaluation can transform a group of strong individuals to a collective body of focused board members who become invaluable to the CEO, senior management team, and all stakeholders. A skillful board evaluation can cause directors to say “I’m glad we did that.” This kind of skillful evaluation is produced from: 

• Clear board objectives;
• Reports and feedback from a knowledgeable third-party facilitator where needed;
• Facilitated follow-up discussions with the board to identify board development actions;
• Integration of the board evaluation into strategic leadership and planning; and
• Insights that lead to greater team effectiveness.

Deciding Whether to Use a Third Party Facilitator

As the board embarks on the evaluation process, it is important to decide whether to use a third party facilitator. Employing a third-party consultant usually allows for greater objectivity and credibility, not least as a means of satisfying shareholders that an independent review has been carried out. The board can choose the level and the areas of engagement for any board consultant. At times the third-party facilitator may only help with question development, or simply analyze the data, or the facilitator may be assigned to run all aspects of the board evaluation. The board may want to start with a small project, such as evaluating one of the committees, to become more familiar with the consultant and process. After a trust level is established, the board can increase the engagement level. 

A board may not need a consultant for every annual evaluation, or while the board’s agreed-upon action items from previous board evaluations are still in process. The board would probably not use a facilitator when the board chair has only been in the position for a short period of time, or when the board has just recruited, or is in the process of recruiting, a number of new directors. 

To choose the right methodology and provide a balanced approach, the board should understand the risks and rewards of a board evaluation. 

Risks of Engaging in a Board Evaluation

Some examples of risks that I have seen from board evaluations, and ways to alleviate those risks, include:

Risk: Consultant misuse of data.
Remedy: Ask how and where data is stored, and for how long. If answers are unacceptable, consider using the third-party facilitator just to analyze data and provide feedback.

Risk: Loss of collegiality and negativity as a result of candidate feedback. 
Remedy: Review the past methods of board evaluation and assess the level of feedback given to the board. Consider a hybrid methodology that includes a questionnaire accompanied by a self-evaluation for each director.

Risk: Directors’ perception of performance is not in line with evidence that suggests otherwise.
Remedy: Consider hiring a third-party facilitator to provide feedback and possible coaching sessions with the board.

Rewards of Engaging in a Board Evaluation

Examples of rewards that I have seen from board evaluations include:

• Provides a timely platform for directors to voluntarily resign, and sharpens the discussion of the experience, expertise, diversity, independence, leadership ability and character needed by the new directors;
• Identification of new or refined actions for risk reporting to the board, including crisis and reputational management;
• Clarity and enhancement of management reporting practices that affect the board; and
• Enhanced board effectiveness with identification of board dynamics and facilitation of discussion to ‘clear the air.’

In today’s world, corporations are establishing processes that have an emphasis on collective wisdom for competitive advantage. This concept can be actualized at the board level through the board evaluation process, even though evaluation techniques are still in their infancy. The process can result in high-level thinking in a structured, organized manner, and lay the foundation for continuous improvement. 

For more information, see: Board Evaluation: Creating Strategic Performance and Effectiveness ($9.99ebook Amazon, B/N, Apple iBookstore)

The Wall Street Journal reports approximately 19 percent of the largest public U.S. companies hired an outsider to evaluate their boards in 2013 — a 17 percent leap since 2010. Those numbers come from Spencer Stuart, an executive search firm. In five years, up to 35 percent of major companies could be putting "board doctors" to use. Financial and banking firms were some of the first to start making calls for checkups.

Fundamentally, a board evaluation is an opportunity for boards as a collective body to increase their effectiveness based on feedback the evaluation provides. Continuous improvement and development of board and board committee processes and procedures is imperative to ensuring board effectiveness. Today, there is an increased level of acceptance and sophistication in board evaluation. However, the evaluation techniques are still in their infancy. I foresee that this acceptance will continue. You may ask why. My observation is that the driving forces are based in the heightened regulatory environment and increased reputational concerns coupled with pressures from shareholders.

Today, each individual director’s value to the board is coming under sharper scrutiny. Conqueringly, I see a new generation of directors on boards that come to the position with openness rather than a resistance to evaluation. These new directors do not seem to be nervous about evaluating their colleagues, and they have their own standards of excellence and hope that their colleagues do as well. Basically, they do not see their performance in the boardroom outside of the standards of their executive capacity. They want to know what a board evaluation involves, what works, what does not work, and why. Finally, most notable, little by little, the antipathy that sometimes surrounds board evaluation is being replaced with a desire to see how an individual director’s performance compares to that of his or her peers.

For more information, see: Board Evaluation: Creating Strategic Performance and Effectiveness ($9.99ebook Amazon, B/N, Apple iBookstore)

With 332 million users and two people joining a second, LinkedIn is the top-of-mind network for professionals looking to advance their careers. LinkedIn offers five significant opportunities to expand your network that save time and escalate your visibility – marketing, branding, networking, communicating and researching people. Below are three areas to focus your efforts:

Compose: Use the tools LinkedIn provides to share your expertise. For written work, use the Long-form Post feature and start discussions in groups with board-level discussions. To showcase your materials on your profile, use the LinkedIn Professional Portfolio capabilities to upload media or point to websites that include:

• Examples of your work
• Written or video testimonials
• Presentations you have made

Connect: Add connections consistently and strategically. Target the people you want to connect with and the groups you want to join. LinkedIn now limits the number of searches you can do each month so be thoughtful by using key words such as board of directors, independent directors and CEO. (As of the writing of this post, the number of searches allowed has not been disclosed).

Consistency: Consistency is one of the cornerstones of a successful marketing strategy on LinkedIn. By coordinating your efforts, you can amplify your message and reach a much larger audience. This can be done by using the appropriate keywords in your written material and branding statements that are in keeping with your board-level value proposition. You can also leverage group activities by posting and commenting within your brand.

Interested in more information? Join us Wednesday, March 4, 2015 at 9:00 a.m. PT, for an in-depth webinar titled “Edge Up YOUR LinkedIn Presence to Gain That Corporate Board Seat.” 

A great resource for director candidates is an ebook: Becoming a Public Company Director: Social Media Strategies (Amazon, Barnes, iBookstore $9.99).

1. Tie your strengths to accomplishments. First prioritize your strengths in relationship to a board seat. Then, show progress over your career of how you matured in the areas that are part of your board-level value proposition.
2. Get recommendations that speak to your strengths. Leverage the experience of top-level executives to enhance your network. If you presented to boards or worked with board committees, this is the very best place to ask for a recommendation.
3. List your promotions. Throughout your career you have moved up the ladder. Highlight this with bullets in each position. This should also include your non-profit work.
4. Use keywords in the title line. You are allowed 100 characters in your experience titles. Use all the space by adding keywords. For a CIO you might list: CIO, Technology Strategist and CEO Advisor.
5. Define and use keywords. Use keywords from your board-level value proposition. Be sure to use your most important keywords numerous times. This will optimize your chances to be found when searches are done.

Interested in more information? Join us Wednesday, March 4, 2015 at 9:00 a.m. PT, for an in-depth webinar titled “Edge Up YOUR LinkedIn Presence to Gain That Corporate Board Seat.”