I’d like to be on Disney’s board of directors. So I reached out to Larry Stybel, a headhunter who specializes in board-level executives, and asked how I could pull this off.
“I can’t, you can’t, and most CMOs can’t,” said Stybel, whose consulting firm, Stybel Peabody Lincolnshire, specializes in corporate governance and leadership change. “Companies like Disney are looking for the CEO of a name brand company—or an ambassador or a senator. Disney isn’t going to ask you or me to be on its board, so get over it.”
That might humble most people, but I know from my own career that there’s usually more than one way into a company. Sure, it might take a little time, but I could cultivate relationships with people connected to someone on Disney’s board. Maybe that way I will get the endorsement I need.
Stybel laughed at me. “It’s not like you and another board member at Disney are friends and you talked on the golf course. Board members are people very concerned about their reputations. There’s a process,” he told me. To avoid being criticized by shareholders for favoritism, corporate boards set up nominating committees to field candidates for board slots. “If anyone is sued, the process is documented, and the records can be subpoenaed,” Stybel explained.
There must be some way in, I pressed. Where does any executive start if he or she wants to get on a board of directors? With the right questions, Stybel said:
- What kind of board do you want to be on?
- What kind of board can you qualify for?
- What value do you can you offer at a full board level?
- What’s your value at a board committee level?
- How do you position yourself to get on a board?
If that seems like a lot to think through, then you’re right. But don’t throw in the towel. Here are three compelling reasons why almost any CMO should consider joining a board and developing a board-level career right beside a regular job:
- to develop big-picture management skills
- to get hands-on experience in other industries and business segments
- to gain top-level networking opportunities with C-level executives outside the normal circles
We’ll further explore those benefits in Part 2 of this article; in this, Part 1, we’ll start with an overview of the types of boards, and how to work your way up the food chain to get on a board right now.
Two Kinds Of Boards
Two types of boards exist: a board of directors and a board of advisers. A board of directors entails some serious liability, including fiduciary responsibilities such as protecting the rights of shareholders and ensuring a company is not mismanaged financially. This type of board keeps an eye on the CEO, for example. That’s why they need D&O (Directors and Officers) insurance: to protect their personal wealth.
Another kind of board, a board of advisers, usually serves companies that don’t have outside investors whose interests need protection. Advisers don’t usually deal with financial issues or face liability for them. Boards of advisers are often established to help build a business and are common, for example, in life sciences companies, Stybel said.
“Suppose I have a new pharma company that is going to cure cancer. The problem is, no one has heard of Larry Stybel,” he said. “On the other hand, if I have an advisory board with a Nobel Prize winner in medicine, I can leverage off of his reputation and integrity. If Jonas Salk is on your board, why would he put his reputation at risk? Investors and customers would take you seriously.”
If you still want to be on a board of directors, then you need to find your place first.
Work Your Way Up The Food Chain
Disney and other Fortune 100 companies are at the top of the board food chain. If you’re a small executive fish trying to develop your credentials and expertise, then “start where it’s easy and work your way up,” Stybel advised.
“Where are you now, and what’s one click up?” he asks. In other words, reach a little. Consider where you are in the business world today. Disney isn’t going to bring you on if your last stop was the board of your local library. It will take time to move up through a series of typically three-year terms on each board. But a solid CMO might be attractive to a small, promising startup that needs help expanding its market.
Because of the time commitment, some executives think they can wait until they retire before they pursue board positions. Stybel scoffed at this strategy: “First I’ll do my job, then after I retire, after my company is acquired and I get out of there, then I’ll look for a board seat. That’s the worst thing you could do!” he said. “When’s the time to do retirement planning? It’s not when you’re retired. No—once you’re retired, you’re just not that interesting.”
But a CMO can almost certainly get on a board if you start small. “At the bottom of the food chain are professional associations, human services agencies, and your church. And it’s relatively easy to get on a board like that,” Stybel said, adding, “What’s hard is to get off of it!”
Do you really need to start at the bottom? Probably not, but it’s important to ask what kind of board you should target. To make your choices more meaningful, Stybel offers this seven-level food chain that executives often follow to the top:
Large Cap Public Company: You’ll spend up to 300 hours per year on this kind of board. The main job is oversight. The real work is done by committees of the board, and you’ll probably serve on two. You’ll make pretty good compensation, but there’s a lot of public exposure and risk to your reputation if something goes wrong.
Mid-Cap Public Company: The job is similar to Large Cap, with slightly lower compensation and risk.
Small-Cap Public Company: You will probably do as much advisory work as oversight. These boards are less risky, but the compensation is lower and might be mostly in the form of stock options. There will be less committee work and a smaller staff to help you, but you’ll be working more closely with management to build the business.
Private Company (positioned for IPO or to be acquired): You’ll roll up your sleeves and work more closely with all the other board members—probably not so much on committees. You’re likely to help pave the path to an IPO, merger, or acquisition.
Private Company (to continue heritage): “This might be a family-dominated business,” Stybel explained, where there could be personal dramas. “It may or may not have an exit strategy.” The board will probably deal with challenges of succession, sibling rivalries, and management competence. But it may be very rewarding to work elbow-to-elbow with the owners. As a Harvard-trained organizational psychologist, Stybel finds the family battles interesting. But the board members? “They’re going to seriously think about hari kari. They’re going to think this is so dysfunctional,” he said. You would be paid cash or a salary for attending meetings.
Large Nonprofit: This might be a hospital, a college, or a foundation. If you’re going to try this, then “you must believe in the mission,” Stybel explained. “Not only will you not receive compensation, but you will also be expected to donate money.” Most of the work is done by board committees, and unlike companies, which usually have seven to nine board members, nonprofits may have 20 to 25. You’ll have lots of visibility in your community, and you’ll get to work with many other business leaders.
Small Nonprofit: Again, the mission is paramount for board members, and the focus is probably very local and community-centric. If you are a sophisticated business person, this is the kind of board where you will get to show your stuff—and receive recognition. There will be no cash compensation, “but the need is great, and they will value your service,” Stybel said.
While Stybel’s firm conducts searches to fill board seats, a significant part of his work is leadership consultation and career management for C-level executives. (He also writes the “Platform For Success” feature for Psychology Today.) When he advises his executive clients about choosing which board level to target, Stybel suggests they find a balance. What are your interests? Where can you make the best contribution? Where are you most likely to fit? What kind of board do you want to be on?
Those are the questions we’ll answer in next week’s look at ascending to the board of directors. To motivate you, Stybel will offer some compelling reasons why you should join a board—and we’ll consider the story of a CMO who used his board experience to land a CEO job.
And read related article, "The Well-Behaved Board Of Directors: Nose In—Fingers Out."