Changes in the Boardroom

The board is a governing body that makes key strategic decisions about a company (private or public) or an institution (universities, schools, non-profits, for example). Generally speaking, the board reports to shareholders or to the government, depending on the type of organization. You could think of the board’s role as both strategic and custodial: it is there to keep the house in order and safeguard it for the future. But more importantly, it provides leadership and vision at the very top level.

Most boards include executive and non-executive directors. An executive director might be a CEO or COO or CFO who has a paid role in the organization and sees it from the inside. Equally important are non-executive directors who are appointed to offer their expertise either in the industry or more broadly in corporate governance.

Board appointments are traditionally prestigious and sought-after. So how do you get appointed? How are people selected? What do they need to do?

For a long time, boards tended to resemble old-boy networks. They were cushy positions which paid well and asked for very little in return. They were also either long-term appointments or had no fixed end-date. As ex-BMO chief economist Sherry Cooper argued in a recent article in the National Post, the process of getting appointed to a board is essentially a catch-22. To actively seek a particular board appointment is, at the same time, to take yourself out of the running for it. And even then, because positions don’t tend to be advertised, you’re not even sure it exists in the first place. In other words, getting a seat on a board is – or at least was – more of an invitation than an application: don’t find us, we’ll find you.

What’s interesting to see is that this is changing. In 2015, the Ontario Securities Commission will bring in new regulation known as ‘comply or explain’. First, companies under its watch will be required to publish diversity goals. Then they need to either achieve those goals or explain why they haven’t. It’s designed to make the whole process more transparent. It recognizes that these are important and powerful positions and companies need to be held to account for how they fill them.

Our advice, if you want to become a board member, aside from having many years of relevant senior level business experience, is to set yourself up to be an attractive prospective candidate. Let people know you’re open to the idea. At the end of the day, board members are selected based on the skills and experience they can bring to the organization.

First, complete a director’s education course. This will help you understand the responsibilities and liability involved in such a role.  Get some practice – consider working with a non-profit organization as a first step.  Do some research to understand the types of organizations where you can add the most value.  And, of course, it helps to network.

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