As a board consultant, I have been told a number of stories from first-time directors who gained a board seat only to discover troubling issues after accepting the board position. The single most important task before you join a board is due diligence. Instead of merely examining the rewards of board service, a board candidate also needs to explore both the risks and rewards. In a world marked by disruptive forces, sharp scrutiny, and tighter board accountability, wise director candidates are asking more questions. Whether you are considering a for-profit, non-profit, government, or advisory board seat, examining both the risks and rewards in a systematic fashion sets the groundwork for a thoughtful career move. Not everything that glitters is gold! When I read this week that Morgan Stanley says it will launch a portfolio that will invest only in companies that have at least three women on the board, I wanted to point director candidates to a source that provides step-by-step instructions for the process of discovering important information about an organization - New Director Board Due Diligence - ($9.99).

I continue to get questions about the role of social media in board networking and how to create an impressive online presence.  As many of you know, I just finished writing the Board Guru™ Becoming a Public Company Director: Social Media Strategies. So this week I was intrigued when I read that Enterasys — a wireless network provider — will be considering applicants for a six-figure senior social media position, but NO paper résumés will be accepted (recruiting solely via Twitter). No doubt we are becoming habituated to social media. The best social media site to build your board-level online presence is LinkedIn. The use of LinkedIn can include posting relevant content in board-focused groups and use the feature provided to tweet those posts at the same time you make them live on LinkedIn. LinkedIn also provides a way to upload your video resume and add personal recommendations. All of this activity will build your profile ranking on LinkedIn; my LinkedIn profile made the Top 1% most viewed LinkedIn profiles for 2012! In the world of director search, you still need a paper resume (your tweets have not replaced a board resume) but to be seen as current you need a robust LinkedIn profile. 

A number of you have asked about the role of LinkedIn in board networking and how to create executive-level self-promotion.  Social media has become the fastest adopted form of media in human history.  While we are still in the early stages of this phenomenon, I do think that dedicated time networking on LinkedIn is well spent. Once I reached the level of posting strategic content based on my expertise in LinkedIn groups (once a week with content from my Board Guru™ eBooks), I had my first client within 90 days in the fourth quarter of 2012. I do not think that the fundamentals of how a director search is done will change dramatically; I do think that a focused effort on LinkedIn will provide visibility and introduction. For example, you can join my Board Guru™ LinkedIn group and meet executive recruiters, sitting directors and director candidates. (For more tips, see Becoming a Public Company Director: Social Media Strategies) To help you begin your own executive-level conversation on LinkedIn, here are a few ideas:

1. Use your content.  Write a piece of 200 – 300 words on a board-focused topic you are an expert on.  Add a call to conversation at the end. One of the best examples of this type of post is done by Lucy P. Marcus on LinkedIn.

2. Share event key thoughts. Contribute some of the substantive thoughts, what your learned or what surprised you from a conference or webinar you attended.

3. Best Practices. Pick a topic and share the story with the best practices used or learned.

Tracy E. Houston, M.A. is the President of Board Resources Services, LLC. She is a refined specialist in board consulting and executive coaching with a heartfelt passion for rethinking performance, teams, and the boardroom. With a focus on leadership, strategy, and risk management, she consults primarily with directors, presidents, and senior officers to provide input on high level, sensitive, and complex issues. Sometimes called the Chief Potential Officer, Tracy has a background that includes sitting on a number of boards, board consulting, and coaching for potential. She develops unique insights into the vital role of human interaction and the inevitable fusion between barriers to growth and success. Extensively published, Tracy has written hundreds of blogs that are featured on numerous award-winning websites and has a monthly board column hosted by ColoradoBiz Magazine. She is the creator of the Board Guru™ eBooks –a corporate governance leadership series. 

Her company, Board Resource Services, has a website at www.eboardmember.com and www.eboardguru.com. Follow Tracy on Twitter @BoardGuru. Headquartered in the Denver, Colorado area, Tracy is an avid hiker.
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 For a complimentary 1-hour consultation, email: [email protected]

A number of you have asked for ideas that would help you gain a focus for your social media plan. Here are a few tips:

1. Start your social media self-promotion plan in phases. First you must get clarity around your goal. Then determine how much time you want to dedicate to your online presence. In my new ebook, Becoming a Public Company Director: Social Media Strategies I provide suggestions that will help you define your board-level expertise, and ultimately integrate all activities into one fully realized strategic marketing plan.

2. Join a few LinkedIn groups that have a board focus. Find the social network that will help you reach your goal. Identify where your audience is online and work from there. Having a few, established social media destinations is better than having a dozen that make keeping in touch too much of a commitment.

3. Be consistent in your self-branding. Write ONLY about subjects related to your board-level expertise - it is your brand.

Tracy E. Houston, M.A. is the President of Board Resources Services, LLC. She is a refined specialist in board consulting and executive coaching with a heartfelt passion for rethinking performance, teams, and the boardroom. With a focus on leadership, strategy, and risk management, she consults primarily with directors, presidents, and senior officers to provide input on high level, sensitive, and complex issues. Sometimes called the Chief Potential Officer, Tracy has a background that includes sitting on a number of boards, board consulting, and coaching for potential. She develops unique insights into the vital role of human interaction and the inevitable fusion between barriers to growth and success. Extensively published, Tracy has written hundreds of blogs that are featured on numerous award-winning websites and has a monthly board column hosted by ColoradoBiz Magazine. She is the creator of the Board Guru™ eBooks –a corporate governance leadership series. 

Her company, Board Resource Services, has a website at www.eboardmember.com and www.eboardguru.com. Follow Tracy on Twitter @BoardGuru. Headquartered in the Denver, Colorado area, Tracy is an avid hiker.
​
 For a complimentary 1-hour consultation, email: [email protected]

A number of you have asked for ideas that would help maximize your efforts to gain a public company board seat. Here are a few tips:

1. Add a video to your LinkedIn Summary section. A 2-minute video is an excellent way for recruiters and others to have access to a quick summary of your board-level expertise.

2. Expand the descriptive words in your LinkedIn Professional Headline section. Increase your visibility by adding words that recruiter might use in a director search such as independent director or board of directors.

3. Read the Board Guru™ eBook - Becoming a Public Company Director ($9.99).

 Tracy E. Houston, M.A. is the President of Board Resources Services, LLC. She is a refined specialist in board consulting and executive coaching with a heartfelt passion for rethinking performance, teams, and the boardroom. With a focus on leadership, strategy, and risk management, she consults primarily with directors, presidents, and senior officers to provide input on high level, sensitive, and complex issues. Sometimes called the Chief Potential Officer, Tracy has a background that includes sitting on a number of boards, board consulting, and coaching for potential. She develops unique insights into the vital role of human interaction and the inevitable fusion between barriers to growth and success. Extensively published, Tracy has written hundreds of blogs that are featured on numerous award-winning websites and has a monthly board column hosted by ColoradoBiz Magazine. She is the creator of the Board Guru™ eBooks –a corporate governance leadership series. 

Her company, Board Resource Services, has a website at www.eboardmember.com and www.eboardguru.com. Follow Tracy on Twitter @BoardGuru. Headquartered in the Denver, Colorado area, Tracy is an avid hiker.
​
 For a complimentary 1-hour consultation, email: [email protected]

Does Your Board Have a Bell-Jar Ecosystem?

The progressive boardroom moves the needle away from operating in a vacuum with targeted board recruitment for the 21st century. While turbulence is not new, its nature and degree present an ever-increasing need for executive-level acumen to capitalize on opportunities and mitigate risks in the ever-more-sophisticated business environment. According to Spencer Stuart approximately one-third of the 2014 S&P 500 board appointments had no previous public company board experience. While adding first-time directors with no board experience is a step away from tradition, the advantages can far outweigh the risks.  As Einstein stated, “The measure of intelligence is the ability to change.” In a disruptive era, a progressive board prepares for and anticipates critical incidents outside of the steady state and recruits board candidates from that framework.

Drivers of Change

• Knowledge: universally available and rapidly obsolete
• Uncertainty: increased uncertainty and risk
• Business environment: more global and diverse
  

For public companies, a few critical incident areas that can define a director search framework are:

• Strategy and Performance: changes (disruptive → crisis) that require a company to revise strategy
• Transactions: (self-initiated → takeovers) that fundamentally change a business
• Reputational Risks: (major accidents → activist investor actions) that require a stand-out response
  

Those that have been tested in the fires of disruption and transition show a capability for value creation in today’s world. These are “turbulent times,” and competing and succeeding in this environment requires directors to focus on what really matters and show a track record of due diligence.

If your board is considering the addition of a first-time director, here are few things to keep in mind:

·         Obtain solid references from executive-level professionals who have worked with the candidate on a day-to-day basis and have intimate knowledge of their leadership competencies.

·         Look for a honed ability to absorb, analyze and process a great deal of complex information to identify pertinent questions.

·         Identify the skill and savvy to balance a sense of unity with openness to all relevant information that may risk a fracas from time to time.

To compile a “best reads” list for corporate directors and director candidates is a challenge that keeps me on the cutting edge.  Feel free to just review the list, provide feedback on what you like and challenge what you feel is not worthy of the list- maybe even make suggestions about what to read next.

1. Coping with a Still-Fragile Global Finance System
An Interview with Martin Wolf of the Financial Times

2. How the Best Board Directors Stay Involved  
By Bill Huyett and Rodney Zemmel in HBR

3. Making Board Evaluations a Best Practice
By Marlisse Silver Sweeney in Corporate Counsel

4. Email Intelligence - Does Your Board Possess it?
By Donna DiMaggio Berger, Esq., Shareholder with Becker & Poliakoff.Blog

5. 2015 Investor Survey: Deconstructing Proxy Statements — What Matters to Investors
By David F. Larcker, Ronald Schneider, Brian Tayan, Aaron Boyd
Stanford University, RR Donnelley, and Equilar.

6. The Unintended Consequences of Proxy Access Elections
By David A. Katz, Wachtell, Lipton, Rosen & Katz,Harvard Law Blog

7. What CEOs Are Afraid Of
By Roger Jones, HBR

8. Keeping Your Eye on Risk: A Guide for Boards
By Yelena M. Barychev and Jane K. Storero, The Legal Intelligencer

9. The real business of business   
By Marc Goedhart, Tim Koller, and David Wessels, McKinsey

10. A New Focus on the Governance Committee
By Aaron Boyd, Director of Governance Research, Equilar

To compile a “best reads” list for corporate directors and director candidates is a challenge that keeps me on the cutting edge.  Feel free to just review the list, provide feedback on what you like and challenge what you feel is not worthy of the list- maybe even make suggestions about what to read next.

1. Berkshire Beyond Buffett: The Enduring Value of Values
By Lawrence A. Cunningham, Author

2.  Redefining Capitalism   
 By Eric Beinhocker and Nick Hanauer, consultants, McKinsey

3. Tesco's Meltdown Shines A Light On Board Evaluation
By Dina Medland, Forbe’s Contributor

4. Vanguard's McNabb, on Corporate Power   
By Joseph N. DiStefano, Philly.com’s Business Writer

5. Twitter Slam Following a Whisper Campaign: The New Activist Investor Plan
By Christopher Westfall, FEI Daily

6. The Handpicked CEO Successor   
By David F. Larcker, Stephen A. Miles, and Brian Tayan, Stanford Closer Look Series

7. The Rise of Political Risk
By Edward Teach, CFO.com

8. Beyond the Duty of Care: 3 Sources of Director Liability
By John R. Monsky and Stephen J. Shimshak, Corporate Counsel

9. Shareholder Scrutiny and Executive Compensation    
By Mathias Kronlund of the Department of Finance at the University of Illinois at Urbana-Champaign and Shastri Sandy of the Department of Finance at the University of Missouri at Columbia.

10. 90% Of Investors Satisfied With Corporate Board Performance   
Posted by Value Walk Staff

To compile a “best reads” list for corporate directors and director candidates is a challenge that keeps me on the cutting edge.  Feel free to just review the list, provide feedback on what you like and challenge what you feel is not worthy of the list- maybe even make suggestions about what to read next.

1. Special Report on Ethics & Compliance
By David Bogoslaw, editor, Corporate Secretary

2. The Spotlight on Boards  
By Martin Lipton, founding partner of Wachtell, Lipton, Rosen & Katz

3. Survey of Board Leadership 2014 
By Robert E. Hallagan and Dennis Carey, both Vice Chairmen at Korn Ferry

4. Does the Composition of a Company’s Shareholder Base Really Matter?
By By Anne Beyer, David F. Larcker, and Brian Tayan, Stanford Closer Look Series

5. Boards Still Don’t See the Value of Digital
By Walter Frick, associate editor, Harvard Business Review 

6. Is Climate Change a D&O Insurance Issue?
By Kevin M. LaCroix, attorney and Executive Vice President, RT ProExec, a division of R-T Specialty, LLC. RT

7. What the Boss Makes: Silicon Valley CEO Pay Can be Perplexing, No Indicator of Talents
By Steve Johnson, reporter, San Jose Mercury News

8. Strategic Principles for Competing in the Digital Age
By Martin Hirt and Paul Willmott, consultants, McKinsey

9. Replacing the Board: The Case for Outsourcing Company Boards.
By Economist Staff, Contributor

10. How Sudden CEO Deaths Help Us Understand Executive Compensation
By Patrick Clark

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)