In a 2008 global study by IBM, “The Enterprise of the Future“, CEOs and business leaders reported that the rate of change organisations are experiencing is accelerating and many are struggling to keep up.
Some of the approaches being used by outperforming companies to address (and preferably anticipate) these challenges are complex and bold, such as reinventing and disrupting business models, innovating aggressively, partnering more extensively and collaborating with customers.
With these demands occurring on a global stage, positioning a company effectively does not necessarily have to lie with the executive and management team alone. A Board (whether an Advisory Board or Board of Directors) is a good way of bringing in expertise to assist a growth company, providing additional knowledge based on their disparate experiences and perspectives.
Typically, those people seeking Board positions alongside the usual suspects of investors and venture capitalists are former and current CEOs and executives. Just as VCs and shareholders bring more than money to a growing company, so do seasoned executives.
The reasons executives become involved in a growth company as Directors and Advisors are many and varied, however they mainly focus around three key themes: their interest in contributing to the success of the business (based on their past experience and/or specific expertise), the opportunity to work with the executive team and other Board members, and the capacity for them to develop personally in the role.
We have found that at the senior level, the calibre of colleagues is one of the most important factors in selecting a position – and Board positions are no different. Prospective Board members generally want to know about the people they will be working closely with – the chairperson, executive team and other Board members – to assess and ensure an alignment of their respective ethical and other values.
Related to this are personal/career development factors based on the particular company’s vision and strategic business plan, the depth or breadth of the market opportunity and whether the industry is of interest to the former executive. Remuneration considerations tend to be secondary, though it is expected that some reward for effort is given in return for their expected time and energy commitment; whether comprised of Board sitting fees, equity/options or even performance-based pay (as Coca-Cola introduced for its Directors).
Some prospective Board members of small growth companies start out mentoring the executive team or the Board members, which can then progress to an Advisory Board or Board of Directors position. Others determine upfront the optimal “win-win” for both the company and experienced executive. Ultimately, the company (and executive) need to determine how best to deploy their skills and experience, and prospective Board members assess the level of time commitment and responsibility/risk they’re willing to take on while building up confidence that the company values financial control and compliance through doing its own due diligence.
Even though Directors are predicted to be the scarcest talent to find in the Asia Pacific region during 2009, I’ve yet to see the evidence.
So if your company hasn’t established a Board of Directors and/or an Advisory Board, you may be missing out on some fantastic expertise and advice. What are you waiting for?
Karen Jenkin is co-founder and Executive Director of Six Figures, an executive jobs, news and services site that caters to people earning six-figure salaries across all industries and professions. Six Figures includes a Directorships area to meet the demand from executives for finding Director and Advisory Board roles.