Getting on Corporate Boards

Anita Brick: Hi, this is Anita Brick and welcome to CareerCast at Chicago Booth. To help you advance in your career. Today, we're delighted to speak with Nancy Falls. She is the CEO of Consensus Company, a firm that helps companies transform the way their boards and leadership teams work together. And she is the author of Corporate Consent in the Boardroom: Ten Imperatives to Drive High Performing Companies. With more than 30 years of experience in and out of the C-suite and the boardroom.

Nancy is a leadership and governance expert who understands what it takes to drive authentic success. Wow, that is really impressive, Nancy, and we're so excited that you're here today, because this is a topic that I hear from people a lot. How do I do this? Why am I having trouble doing this? Clearly we have a number of questions, but first and foremost, thank you for making the time.

Nancy Falls: Thank you. I'm delighted to be with you.

Anita Brick: So let's start off with a question that maybe isn't an obvious question, but I was actually delighted that an executive MBA student asked it. He said, why actually should one aspire to be a.

Nancy Falls: Director on a corporate board? I love that question. Actually, it's the first question that anybody should ask themselves before they think about building a path to the boardroom. That is the number one place that you should start. Why do I want to be on a board? Answering that question is a very individual thing. I am delighted at the interest that folks are increasingly having in the boardroom and in governance, because governance matters so much, and it is a place where there are lots of universal problems that need to be solved.

We need really talented people to come and solve them. I think it's great that people are interested. It gets very personal once you ask a question like that and somebody has to say, okay, why am I interested? And how do I see my potential contribution in the boardroom in a particular company? I say to folks, number one, on a three point plan, if you will, for finding the boardroom role for you is why do I want to do this?

It is really important. And folks like your students and your alums bring a lot of capability to solve the problems that need to be solved. As long as they ask themselves, what am I going to contribute as opposed to starting out? What can I get out of this? I think they're off to the right start.

Anita Brick: It's great. And that is a big, big factor because a lot of people think, well, yeah, this is going to help me. Of course it is going to help them. But everything starts with what kind of contribution can you make? The other related question to that one specifically as a starting point is when does one actually start looking at pursuing opportunities to be on a board?

Nancy Falls: That's another great question and another very individual question. There are lots of opportunities for people to pursue board involvement early in their career, but with different types of organizations. Some people ask me, is it good to think about doing volunteer boards or non-paid boards, or is that really irrelevant to public company boards? And if it's a good board, I say it's a great place to contribute and to learn, because governance is as much about how you're working with a group of people on a team with a specific goal.

As anything else. And it's a wonderful place to contribute and to learn at the same time. So I think early in one's career, contributing on volunteer types of boards and everybody could be on board, whether it's a co-op board or a not for profit board or the Y board or a variety of things. There are lots of opportunities early in the career to do things like that.

I think in terms of larger corporate boards, for profit boards, paid boards, those are things where one is more able to contribute later on in one's career, where they can pull together the right combination of functional skills and expertise for the hard skills as we think about them. But you've had more time to have experiences which bring about those softer skills or leadership skills later on in one's career.

Anita Brick: It makes sense. You answered a question that someone had because they were wondering, is it worth the time? And it sounds like you're going to get some fundamental board skills that could potentially be parlayed into a. Corporate board, correct? Another executive MBA student. This is also a really good foundational question. Many aspire to benefit from understanding the dos and don'ts during the hunting for a board director position. Can you list 2 or 3 of the main ones?

Nancy Falls: I would say the number one one we've touched on a little bit in pursuing a board opportunity. It would be a mistake, in my opinion, to think that it's about you and what you're going to get out of it. And this is actually an area in which we advise mid-level career executives with only work, that once you get to a certain point in your career, you realize that you're more valuable to future employers.

If you are about something larger than yourself. And I think whether people say this or not, people really want those around them to be excited about a larger mission. So I think that's helpful for people once they get mid to their career, if they really want to make it to the next level, beginning to think about a larger mission and being a contributor and a larger goal really seems to help people make it to that next level.

And I think that's true in the search for a board role and a way of contributing on a board. What is it about this organization and what they do that ties to some larger mission? And how does that tie to you, as opposed to just one more thing I want to put on the resume? A and this is really about me.

It's really not about you. It's really about them. And then you begin to ask yourself, what do I bring to the table? Do I bring to the table more than the people who are already at the table or not? So the number one thing to avoid is thinking too much about yourself. And I think the second thing is thinking too globally about it.

Putting together a board is definitely a combination of art and science, and you're putting together a group of people who contribute very different things. And so it gets very specific and very granular, very early. I don't know if this is something to avoid or something to do or they're flip sides of each other, but you have to get very specific about yourself.

So examining what you really are, taking a look at your resume, whatever stage of your career you are in and saying, you know, what do I really bring to the table? What am I functional expertise? What do I really do well? What have my experiences been and how do I lead and can I lead? You know, what's my background?

So those are three important areas that companies looking for boards or organizations looking for boards take a look at and make a match. So it's you know, being too global is a mistake. Getting very specific about yourself and what you have to bring to the table. And then thirdly is assuming that you're a fit for any board that happens to be looking. And that, again, is where you sort of take while you're there and what you want to achieve globally. Pull together your specific areas of expertise and potential contribution, and then look for organizations that really need what you have.

Anita Brick: It's interesting. There was a question, a related question from an evening student, and clearly from the nature of the question, which you'll hear in a second, he feels that there are only certain types that are really attractive to boards, so maybe you can shed some light on this. So these students said, can you share insights for those of us who are not CFO or finance types, what skills and experiences do you emphasize to earn that board seat if you're, say, in operations, is it P&L experience managing a product line, and so on? I feel like finance or the CFO skills are more valued. What can I do to enhance my positioning?

Nancy Falls: That's a great question. It's not a surprising question. My background is in CFO ING, so I hear that differently. One thing that immediately comes to my mind is I sit on a board and I bring to the table all of my financial expertise. I am so grateful for the other people around the table who have very different contributions than I do.

It really is a team sport, and finance is not the only thing going on in a company. The most important things that boards are finding they spend more time on today are strategy and technology and risk, for example, cyber risk, global risk, these sorts of things. So I think people who aren't CFOs see this attraction to CFOs. People who are CFOs, see boards that only want to have CEOs.

Those are some of the common things that people look for. But there really are a whole lot of things. And it gets to be very specific for a particular company. What organization to really love are people who run businesses. And it sounds like the person who asked that question perhaps had run businesses. You know, that's another really important thing.

I would suggest that maybe the person who asked that question was slipping a little bit into those things. I suggested we avoid it when looking for a board role, and that is looking at it globally. Undoubtedly, all of your audience has tremendous things to contribute to a board. They just need to think hard about that. And what are those specifics and what organizations perhaps have a need for that?

I mean, a great plan in my book for how to find a board is once you go through that self-evaluation, look for companies that not necessarily have already done what you've done, but are heading down a path where they're going to need to do things you have already done, or they're going to need expertise that you have. When we work with companies and boards of directors on coming up with the right board composition, we say, make sure you're thinking about where you're going as opposed to where you've been, because you need people with skills that are related to the future achievements and challenges that you had before you.

Let's suppose a company decided it is finally time to go global, and there's nobody there who has global experience. That would be something important, very important to add to the board. Perhaps they are going to be acquiring for the first time and they've always had organic growth heretofore. Maybe there's really not anybody on the board or necessarily depth in the company. For great integrators, perhaps what is needed is capital markets expertise because of transactions that are going to come up. So it gets very specific pretty quickly if they're thinking logically about their board composition.

Anita Brick: That sounds like ultimately, like with most things that relationships come into play in a huge way. How would someone I hope this isn't a naive question, but how would someone gain insight into what are the gaps on the board?

Nancy Falls: It is harder for private companies for sure, because their reporting may not be as available on things like future plans, but it's very surprising what you can find on the internet or on any company website. Most companies list who their board members are. Most of those board members have some sort of imprint on the internet, so you can find out about them.

They're all in some sort of industry, and they may have, for example, a public company counterpart, and you could go to those annual reports and find out a tremendous amount about what the industry challenges are, issues. Our feature is that sort of thing. So I think the issue of the importance of relationships is a whole nother issue and a very important issue.

But in terms of figuring out where you need to play, it's still a matchmaking that starts with a soul searching and then gets very specific about what it is that you've done and how you contribute. And finding organizations where that's a fit. What size companies do you have experience in? What industries, as an instance? What stages are you really good with? Early stage companies? They have their own unique sets of challenges. How about mature industries? Do you know how to work with some organization that's struggling with commodity pricing strength, for example?

Anita Brick: And I think it's a really good point. And when you mention early stage companies, one of the students, one of the evening students asked about that. He said, what advice would you have for those who have worked in startups? How do you break into that inner circle where one company founder CEO sits on a board and it feels like a closed circle?

Nancy Falls: Personally, that was not my experience. I sat on a startup board straight out of not that long out of MBA school, so I was probably 24 or 25. That came through relationship building.

Anita Brick: How do you break that inner circle, especially if you're in a place like Silicon Valley?

Nancy Falls: Well, I think if you set your sights on entering the boardrooms of the next Apple or the next Twitter or the next big break saying, then that's going to be a pretty close circle. You're probably beyond venture capital into private equity at that point in time, and that does get to be rather rarefied air. But companies are starting up, especially in the place of Silicon Valley all the time.

Most folks say if you're a startup company, you need a board of directors. As soon as you've got the time to figure that out, the time to plan on that, because most CEOs and most organizations need the best advice and counsel, the best sounding board, the best pushback that they can get. It doesn't start after you're a mid-stage company and in a situation of startups, they often need more arms and legs.

So I think they're actually tremendous opportunities for startup companies to do board work. A lot of those are uncompensated, but what you can learn is so incredibly valuable. What you can contribute is so incredibly valuable. It might turn out to be the next big thing, or it might not, but it will certainly become part of your portfolio of board capabilities.

Anita Brick: Great. So speaking of that, a lot of board memberships happen because either someone knows the person or at least the person is visible. And let me ask the question. Hi Nancy, I know it's important to make it easy for potential companies to find you. I am also aware that I need to be more visible than just raising my hand for board work. What specifically would you recommend that a business professional do to have the quote unquote right, attractive visibility?

Nancy Falls: That's a great question. And reality is, it is still very much a relationship game. Part of that is for practical and perhaps even good reasons. Other part is less admirable, perhaps, but not every organization looking for a new board member is going to hire one of the top four board search firms and run a national search. They don't have the time or the capacity for that.

For instance, I really think I'm going to circle back to my fundamentals to build the appropriate kind of more public profile about your capabilities. You really have to go back to that basic about why do I want to serve, what can I contribute, what very specifically can I bring to the table, and what kinds of organizations will best be served by me? And then that informs not only what you say, whether it is a cocktail party or it's on the beach. When you run into somebody from a company or in social media, it's going to inform what you say and how you target that. Let's say I have done that soul searching and I really decide. The niche for me is companies that have a little bit of capital, either friends and founders, perhaps even some private equity money, but they haven't made it to the next round.

So they're at a very early stage. I understand the kind of company I've worked in or I get that. And here's what I do. Where do the people who work for organizations like that or who are trusted advisors, organizations like that, where do they hang out? I would say social media is not unimportant if you're in a certain industry or if you're a certain geography, it's more important than in others.

I would say your average boardroom member or C-suite member outside of Silicon Valley, perhaps is not spending a whole lot of time on Twitter. I'm active on Twitter because I like to be in the mix of that exchange of ideas among thought leaders. You need to think about where your particular audience lives and reads and hangs out and looks for advice, the trusted advisor community. And by that I mean attorneys and accountants and folks who consult to boards and to C-suite are often overlooked or under. Emphasize this. People think about bringing their interest and their capability before people who might be in the pathway of need. I would think about that.

Anita Brick: That's very insightful. And it's surprising, though at some level, that someone interested in a board position where they feel that they can add value would not circle around with the trusted advisors. It's a really good piece of advice, and I think often a target that is overlooked. There's a related question from an alum, and this is an alum who would like to be on boards as a full time career, said. I've been on about a dozen different boards for private firms in manufacturing, non-bank financial services, auto racing and media as a representative of a large financial institution which has direct investments in the firm. I've explored opportunities to parlay such experiences into board positions for private companies as a full time career, but I'm generally told that those firms prefer individuals who are investors and or industry specific depth of experience. Any thoughts on how to emphasize my deep board experiences?

Nancy Falls: That's a great, but a little bit of a multifaceted question, if you will. Isn't it, Nancy? Let me see if I can tease a few parts of it out. The first thing that I would say is I would validate what this person is hearing. In my opinion, the importance of industry expertise is often so paramount in people's focus that they forget about the importance of other things. And sometimes you hear that because they've already got a number of board members who have these other things, and they really need more board experience, for sure.

I have heard a lot of the messaging that this person is hearing. I counsel folks to remember that there are tons of companies out there, and there are tons of philosophies and attitudes that are either part of the board culture or part of the company culture, and it's really not worth a whole lot of your time fighting an uphill battle with somebody who doesn't share your views.

And perhaps if you come across as too critical, there are certain people who are forward thinking in the area of governance and those who just aren't yet. I have a colleague who focuses almost exclusively on family owned businesses, and he and I have spoken at length about the common traits between family owned businesses and private equity owned businesses, where I've done a great deal of work, and it's almost as though there are two kinds those that don't really believe in the importance of independent directors and those that do.

If companies aren't to that philosophy, or even perhaps that stage of maturity, then let somebody else spend time trying to convince them they'll find organizations that already do believe in that value. I think industry expertise is a great place to start, even for this person. And if they are in some pretty traditional industries, perhaps some shrinking industries, that's not, you know, a great thing that people like to hear, that they'd rather go do something in tech as a for instance, it's possible to help folks with a translation problem, if you will, between your industry and an industry that perhaps you're interested in, because there may be commonalities.

Sometimes you just have to connect the dots with those. For this alum, I would take some of those organizations and say, all right, maybe some of your target companies or target boards aren't exactly in this industry, but your experience would be proximate to that. And explain to them how it is to make sense.

Anita Brick: It does. To your point, some boards one, A, B, and C and that's all they really think about. And others, you know, are looking at things maybe more open mindedly or trying to get some diverse thoughts. What advice would you give someone on how to learn about the Board culture? For the board director acquisition philosophy?

Nancy Falls: Well, that's a great question. Let's assume someone is on this path through this exercise that I've suggested, and they know why they want to be on board and how they want to contribute. They really understand themselves. And now they have found these target companies that really are going in a place where they understand or have been and need some of those same capabilities.

Then you sort of go in and take a look at the board, who's on the board, what are their bios look like, what are hard skills and soft skills and experiences do they bring to the table? What kind of background? Diversity of experience, thought or sociodemographic do they bring to the table? You're going to see a picture of a board by doing that homework.

And you're going to say, wow, these guys all went to Stanford Business School and they all started in tech or whatever. You might just say, you know, they're not going to see value in somebody like mine. They've had this company for a long time, and they seem to be happy with this, and they're doing well. That's perhaps not a fit for me, but you might see another organization and you might see a greater breadth of experience, but you might see some things that you think are holes. I would expect that if you see a board that looks like it is kind of artfully crafted for where the company has been and where it's going and what its constituencies are, then that might be a really good place.

Anita Brick: Good point. You know, you talked about diversity in a lot of different ways. And one of the evening students asked about diversity on boards and she said, what have you noticed about the attention to diversity on the boards in the US? There are quotas applied to some markets in Europe. Where do you see that trend going and why?

Nancy Falls: I think we're on a journey towards more board diversity. There has certainly been a whole lot of conversation about it. In my opinion, this is progress, and progress has been made. I think stateside progress has been pretty slow in countries overseas where they have quotas, whether it's in the Nordic countries or UK or Germany. Those quotas have made a real difference in the pace of their change.

And the Canadians are looking at quotas now as well. I think the reason that countries have moved to quotas is because the path of progress has not been considered fast enough. There are those in the states who think it's not fast enough and would like more progress. I personally think we need to make progress faster to avoid quotas being forced upon us, if you will, because I'm a free market person myself, I would like to think that we can do this on our own.

It remains to be seen whether we can. There's certainly a lot of conversation about diversity, but as I mentioned, when we first started talking, not everybody can afford to hire a top four search firm and go out and find the perfect, diverse candidate who also has all those soft skills and hard skills that we are looking for and stay in the nation for them. Many companies are still very hampered by how do I find this diverse candidate? Having said that, there are a lot of folks who are afraid of diversity and they need to be made more comfortable with it. I am fond of saying that we're making great progress on the Who and the what of the boardroom, and that really means who we decide we want in the boardroom and what we want to focus on.

Where I get really excited and spend a lot of my working life, is helping organizations with the how of the boardroom, which in honesty, gets trickier the more different people you have around the program table. If you're going to be on a diverse path, you really have to have an intention around and be using all that diversity for progress as opposed to just creating more disruption.

Anita Brick: Very insightful. And it's a very, very complex issue. So more to follow. We might come back to you in the future, but certainly more to follow. Do you have time for one more question?

Nancy Falls: I do.

Anita Brick: Okay. Great. Thank you. We like to wrap things up, and I know you've given us a lot of insights and even actions to take, but if you were advising someone who was building a path to a position on a corporate board, what are three things that you would advise that person to do?

Nancy Falls: I would advise them to first ask themselves why they want to be on a board, and to be thoughtful about that, and have an answer to that question that they can articulate and share with more and more people, as they make known to more people that they want to serve on a board. I would ask them to be very specific about a study, if you will, of their own resume as they think about what hard skills and soft skills and experiences and background that they bring to the table in service. And thirdly, I would have them do research around organizations that are particularly well suited to what they bring to the table. What kind of a company, what size, what stage, those sorts of things, and then seek to connect with those organizations and their trusted advisors.

Anita Brick: I love that because it's very practical and it's something that you can either put a lot of effort into quickly or build the momentum over time. You've given us such great insights, and I know you are a thought leader in this area. If someone wanted to read more of your thoughts around boards, what would be the best site for them to go to?

Nancy Falls: The best site would be our company website which is the company.com. We have a page called Additional Resources where you can find out where we have done a lot of writing about this subject. You can find information on my book Corporate Community The Boardroom. Learn a whole lot more about, as I call it, the how. What makes the practice of leading and governing in the boardroom work?

Anita Brick: Well, it sounds like the boards are very lucky to have you because you provide this really balanced perspective. And I would guess that you push them a little bit too. And that's a whole nother subject as well, maybe for another time. But thank you so much. I know you're super busy. Thank you very much for sharing your wisdom with us and really appreciate that you also wrote the book, which does talk a little bit about the house. So thank you very much for doing this.

Nancy Falls: Thank you.

Anita Brick: And thank you all for listening. This is Anita Brick with CareerCast at the Chicago Booth. Keep advancing.