Board of Directors Recruiting Is Expanding

The Board of Directors of any organization or company plays a critical role in that entity’s existence and success. Its many duties include establishing the strategy and direction for the organization, selecting, supporting, and reviewing the performance of the chief executive, ensuring the availability of adequate financial resources, accounting to the stakeholders for the organization’s performance, and many others.

In light of these important duties, every board wants to make sure that it brings together the directors who will enable the organization to be the best it can be. Each new or replacement director will serve a key role in the board’s ability to accomplish its objectives.

During the past several years, a number of trends are occurring which have a direct impact on a board’s ability to expand and/or replace its members. There are more independent, or outside, directors, especially in publicly held companies. The larger work load and the enhanced visibility of the board have significantly increased the amount of time an individual devotes to his/her board duties. As this time requirement has grown, experienced board members are reducing the number of boards on which they serve. Many experienced board members are retiring or they are reaching an age where they may not be as effective in a demanding board role.

As many boards seek new members, they often target similar candidates. Chief executive officers of other companies are sought by boards because of their professional success, their strategic role within their own organization and its board, and their demonstrated ability and willingness to contribute to the success of an organization. Unfortunately, the time requirements of serving as a CEO and as a director on another company’s board limit the number of boards on which these individuals may participate.

This shrinking number of traditional directors has forced companies to expand their horizons as they consider the addition of a new board member. In addition, boards are taking a closer look at the organization they represent and the many constituencies (employees, customers, vendors, stakeholders, communities, etc.) which they serve.

The marketplace is changing, and many boards are realizing they must change with it. As the recent Census confirmed, the U.S. is, and will continue to be, a country with a wide variety of people. All companies and organizations which seek to employ and serve this diverse population must make sure that they understand the various backgrounds, needs, and wants of these people as well as they can.

The most progressive and innovative companies and organizations are pushing for a more diverse workforce to perform executive-level positions and to sit on their boards of directors. The idea has gone from being a practice that is simply the right thing to do or that is required toward a more pragmatic realization that it makes real business sense.

These companies are not making revolutionary disruptions to their boards, but they are adjusting to the evolution in American business which will enable them to continue to lead the success of their organizations.