Being a corporate board member has its share of great perks. Financially, it pays a lot. Board members of the 500 leading publicly traded companies in the U.S. Market, as listed in the S&P 500 Index, received a record average of $251,000 in 2012. According to Bloomberg, “the average pay for directors is almost six times the $42,700 average salary for private-sector workers holding down full-time jobs.” That’s roughly 1,789 hours of work, as opposed to the 250 to 300 hours rendered by board members in a year. Board members are paid big money for their insight gained from years of experience, something that not many people have.
But the benefits of being a board member go beyond money. It’s also an excellent way to network with and learn from industry leaders and other influential people. And of course, board membership is a badge of honor in itself. When someone receives an invitation to join a board, it means that an organization recognizes his or her expertise. Socially and professionally, board membership is quite a lucrative venture.
There used to be a time when board members were picked because of their status. Big names were popular choices because they generated buzz, giving organizations the publicity they wanted. People who had the necessary skills, experiences, and wisdom to be board members weren’t necessarily invited if they weren’t well-known enough within their industries.
After the financial scandals in the early part of the millennium, it became obvious that tighter corporate governance was needed to protect the interests of shareholders. The Sarbanes-Oxley Act was passed, a law that requires public companies and accounting firms to adhere to stricter standards when making corporate disclosures, such as earnings and losses. As a result, organizations became more careful in choosing truly qualified board members. Also, board members are expected to take an active role in spotting and eliminating fraudulent activities; otherwise, they have the law to answer to.
Because of the rewards and responsibilities that come with being a board member, not just anybody can land a seat on a board. But if you’re a CEO, VP, or C-suite executive, you’re on the right track because you’re already working closely with your organization’s board. Some companies don’t allow their CEOs to sit on their boards, but if your company doesn’t have that kind of restriction, express your interest in getting a seat, especially if you get along well with your board members. If you have a good working relationship with your board’s members, chances are that they’ll be supportive of you.
But if your relationship with them is not as strong as you want it to be, you can improve it by actively working with them. Electronic or virtual board meeting solutions like BoardVantage, BoardPad, Boardworks, and Azeus Convene make online collaboration on meeting documents much easier, so you can use this to your advantage for your next board meeting. Share your ideas, ask questions, participate in discussions – not only will these get you on board members’ radar, but they will also help you be more effective at your job.
Making connections is effective not just for within your organization, but for others as well if you want to expand your options. According to Frontier Communications CEO Maggie Wilderotter, networking plays a big role in getting tapped for a board seat. In the past 28 years, she has served on 23 public company boards, and she attributes her success to “fishing where the fish are.” She knew she wanted to be a board member, so she took on a proactive role by getting to know CEOs and directors. She didn’t sit around and wait for the invitations to arrive – that came later on, after she had already made a reputation for herself. But for that crucial first board seat, she went cold calling industry vendors and asked them to send in proxy votes for her. She was the VP of sales at a small vendor to cable companies at the time, so she offered representation in exchange for the votes she wanted.
Wilderotter didn’t stop there, though. After creating contacts, she made relationships with people by spending time with them and finding out what made them tick. In many ways, getting a board seat is part industry expertise, part public relations skills.
But what if you’re not a CEO, VP, or C-suite executive? It may be harder for you to become a board member, but it’s not impossible. Wells Fargo board member Judith Runstad is a real estate lawyer who served on the boards of theaters and arts groups before she became a corporate board member. She was handling a fundraising campaign when the recipient, Planned Parenthood, decided to offer abortions. This affected donations, but Runstad managed to appeal to local CEOs and to remind them of the other causes the community could support. The campaign ended with record success – and even Microsoft founder Bill Gates donated $100,000.
Runstad showed strong leadership quality that the corporate world noticed. She received invitations from the Federal Reserve Board of San Francisco and Safeco Corp. before she became a member of Wells Fargo’s board. Even though she started out to serve on a non-profit board, the right opportunity gave her the exposure needed to become a viable candidate for corporate boards.
Based on the experiences of Wilderotter and Runstad, there are two things you need to accomplish to get a shot at becoming a board member: Do your job exceptionally well, and reach out to people. It’s a simple recipe for success, but it’s not an easy one to follow. Nevertheless, it’s all worth it in the end.