Not Just any Board by Genevia Gee Fulbright, CPA, CGMA
September 23, 2013
For many, board service started very early.
Was your first board opportunity the President of your middle or high school student council?
Maybe you served as Treasurer of your college sorority or as Corporate Secretary of Beta Alpha Psi or NABA.
What is the current media buzz?
Corporate America is looking to engage select executives to serve on their statutory (compensated) boards either simultaneously as they lead other organizations or upon their exit from full-time employment.
Black Enterprise magazine as well as 2020 Women on Boards, Boardroom Bound and others have recently released articles highlighting some companies that fail to have any minorities and/or women serving on their boards.
The conclusion these articles seems to make is that there are hundreds of qualified minority directors available to serve and add value to corporate boards but for reasons “unknown” they are not being invited to the table.
We can all agree that networking is key.
Also let us not forget that developing a pipeline of qualified minority and female directors who are receiving formal corporate board training will enhance the probability that they will be invited to the table and be able to meet the challenges of board service.
When a Nominations Committee Chair calls
After you have served on a couple of boards you might occasionally receive an invitation to serve on another corporate board.
So what do you do when a Nominations Chair contacts you to invite you to interview for a board opportunity?
Before you say YES to an interview and allow your name to be added to the list of potential director candidates, at a minimum you must gain comfort with the answers to the following “who, what and how” questions, especially if you are asked to serve on the board of a publicly traded company.
- Is currently on the board and are all members reputable. You must be comfortable being associated with all of the current members?
- Plans to remain and will you replace anyone?
- Are the advisors (outside general counsel, external auditors and consultants)?
- Has significant influence on the board (CEO, Board Chair, founding shareholders, major vendors and/or other outside forces)?
You will spend a tremendous amount of time serving on the board and your reputation can be enhanced or possibly tarnished based upon the personality dynamics and board decisions that are made.
You might consider visiting Google or Spokeo to check out some of the directors to see if there are any controversies posted that you might not wish to be associated if not yet resolved.
As a board director you will be asked to make very tough executive decisions (popular and unpopular) so you will want to understand who you will have as your potential team mates to share these important tasks.
Remember, just like people around the board table should be considered the company (a complex legal entity) will have a separate personality of its own.
- Products and/or services are the company’s primary line?
- Ranking does the company have compared to its peers?
- Personal liability exposure might you have if on the board of this company?
- Growth plans/strategic plans appear to be in place?
- Are the profit margins, stock price, and potential for acquisition or to be acquired?
Again, preliminary research will serve you well if you take a moment to perform some of the basic research on the board you are considering accepting an interview for a board opportunity.
If the company is a publicly traded enterprise you will want to first start by perusing 8-K filings, which note significant events affecting the company. Do you see changes in the executive suite such as CEO or CFO, regulatory matters, division spin-offs, merger or consolidation announcements, etc?
Next proceed with the Internet to see what their stock has been doing (i.e. Wall Street Journal, Yahoo Finance, Kiplinger, Morningstar, town newspaper where the company is headquartered) to review recent articles about the company which can help you get a general feel on how the company might be perceived in the market. Are they laying off workers, expanding, being charged with SEC violations? Visit the annual 10-K filings for several years as well as quarterly 10-Q filings to get an idea of what the company has been doing over a period of time and determine if there are any strategic plans in place, projections or other matters that give you a better idea of the direction the company appears to be headed.
Remember, you are being invited to potentially serve on the board for several reasons including your specific expertise, network and/or net worth.
The company will rely on you to serve as part of a “hopefully” cohesive board.
- Are you uniquely qualified to serve on the board?
- Flexible is your schedule to meet the challenges of attending the required meetings and remain engaged?
- Current is your expertise and have you continued to take continuing educational courses, workshops, seminars or self-study?
- Comfortable are you with change?
- Open are you with corporate cultural differences (i.e. socio-economic factors, age/race, management styles, board compared to the average worker)?
- Much learning curve will there be if you join?
Sharing your expertise and solid network to help a company you serve as a director is especially critical as companies are challenged in this political charged, socially connected and rapidly changing environment.
Will you have to juggle your personal schedule to serve on the potential board?
The Take Away
So remember, it’s not just about landing that wonderful board opportunity but also whether or not the opportunity is right for you now and in the future.
You have worked very hard to build your reputation and career and will want to complete your term if invited, even if another “better” opportunity comes up.
During our next segment we can explore warning signs in more detail to consider the difference between a wonderful potential board opportunity and a low-pay financially risky board exposure opportunity.
Editor’s Note: Genevia Gee Fulbright, CPA, CGMA is an Officer of two firms headquartered in Durham, NC. President & COO of Fulbright & Fulbright, CPA, PA and President & Chief Marketing Officer of Fulbright Knowledge Alliances, Inc. Fulbright, a former bank director and national foundation trustee, has served on boards since age 19 and holds several licenses and certificates including Certified Public Accountant (CPA), Chartered Global Management Accountant (CGMA), NACD Governance Fellow, Director of Education Certificate and Bank Director’s College Certificate. Fulbright has published a number of books and is currently working on a title Make the Leap: From Student to Board Director. Fulbright is a guest blogger for Black Women in Business and can be reached at firstname.lastname@example.org or (919) 544-0398.