New Year’s resolution: diversify? No, it is a mandate. California SB826 demands your attention now to attract a diverse Board of Directors in 2019. New Year’s resolution: get help? Yes, Arnold Partners has the experience and the relationships to help you achieve a successful transition to a more effective, inclusive, and compliant Board.
The new law of the land
The California legislature passed SB826 in Oct 2017 with the requirement that public companies include at least one female director by the end of 2019. If your Board has more than five members, two will need to be female. One report indicates that 377 companies need to add at least one female director in 2019. Follow this Link to Read the bill.
Is the law merited?
Some say it is a shame to have to legislate this (agree), others say hooray it is long overdue (agree), and there are those who say it will put female members into a compromised role on the board because they are there only because of the mandate (disagree). To this last point I argue that there are many, many more highly qualified female candidates than needed to fill those 377+ openings. And given the high-quality nature of these professionals there is no way they will not make immediate and positive contributions to the companies they will serve.
However, finding the right female candidates for your Board is the key: a professional who can contribute from day one to numerous key strategic and operational issues.
Finding qualified candidates
Okay, so qualified candidates are out there, but how do you find them? This is where Arnold Partners is uniquely qualified to help your Board identify, assess, and ultimately attract excellent candidates for you. The proof? Just in the last year alone, half of the CFOs we placed are female, and in every search we delivered a high quality and gender-diverse slate of candidates.
The easiest way to gain gender diversity on your Board is to look to the financial community—CFOs, CAOs and the like—to find top tier talent who will make important contributions right out of the gate for your company. While female CFOs are still in a large minority in total, there are many current public sector and retired female CFOs to consider. Arnold Partners has a unique relationship with this community. These financial experts can adeptly serve on the Audit Committee, the Governance Committee, or the Compensation Committee while concurrently make contributions to the larger issues facing any company.
Do quotas work?
Forbes magazine contributor Kim Elsesser wrote about California SB826 in her October 2, 2018 article, “California Mandates Women on Boards, but Do Quotas Work?”:
“The quota law is not going to solve all gender issues in organizations in California, but it doesn’t have to. The quotas will certainly increase the number of female directors, and that’s good enough for me. It may not bring greater corporate profits or shrink the gender pay gap, but that’s okay. It makes a clear statement that organizations that don’t take gender equity seriously are not welcome in California, and that alone makes it valuable.”
I agree with Kim. I would add that the quality of new Directors you want to attract to your Board is of the greatest importance. Partnering with a firm that can help you get the right candidates to the table with a sense of urgency and accuracy is also key. To talk about how Arnold Partners can help, contact me at email@example.com or call 408-205-7373.
Very interesting conversation with a current board audit committee Director and a former Big4 partner last week. He currently sits on three boards: two public, one private. We had a far-reaching conversation on the role of an independent director, and his thoughts on how to get on a board of directors. Given his long career in public accounting and having faced many challenges, I was surprised to hear him say that landing his first director role was “the hardest thing I’ve had to do in my professional life.” Wow. What are the implications of this if you are a sitting CFO with board aspirations? Or a retiring partner from an accounting firm?
Landing a CFO Position vs Your First Seat on a Board
Making the leap to CFO is one thing; it can happen for a variety of reasons, either by planning your career very carefully, working hard and proving yourself. Or, as in many cases, it can be a battlefield promotion because of a business change or departure of an incumbent. It’s not a slam dunk to land your first CFO role, but getting your first director role is a degree more difficult for a number of reasons: the battlefield promotion is probably out. The role is not a natural extension of your current day to day duties. The dynamics of a board are completely different than that of an executive team. So just what’s the ticket for landing a seat on a board?
Strategy for Making the Leap
For frequent readers of my blog the answer won’t surprise you. The strategy for making a big leap in your career, whether you are planning out how to get on a board of directors or land your first CFO role for that matter, is really very much the same. You need to create a game plan to get in front of “people of influence” and consider taking a bit of a risk. (hint: executive recruiters are not the people of influence!)
When No One is Calling
In the case of this former partner, the aha moment was acknowledging that the likes of Apple and Google weren’t calling for him to join their boards. In fact, nobody was. He had been in a relatively strong position of influence, helping major public technology companies on important business strategies. As a sought after opinion leader, he was accustomed to getting calls from CEOs and investors. Once retired from that position, it came as a shock to him that no one came seeking his council any more. This turn of events could be disconcerting and even depressing for some in this position.
Putting Together a Plan… Who Ya Gonna Call?
So he put together a plan for how to get on a board, which sounds simple, but requires a certain amount of discipline and confidence to undertake. He began by identifying people in his former sphere of influence, including investors, board members, CEOs, and former partners. He then started reaching out to these folks to make his intention clear about joining a board. The initial response wasn’t what he wanted: he was invited to join a public company with business complications and a strategy that was not all that exciting. As he said, “It certainly was not an “A” company.” But by trusting his source who led him to this opportunity, he ultimately joined the board. As with anything in life, things suddenly become more attractive once you are involved! A second directorship followed after a couple of years at the invitation of a fellow director. Once his second seat with a more attractive company was secure, his phone starting ringing more often, and he was able work out of the initial seat.
Ready, Set, Go Boarding
So put your most influential and trusted professionals in a cohesive spreadsheet. Select the top10. With persistence, patience and professionalism, get a face-to-face meeting with those 10 influencers. Make clear what your goals are and why you are a compelling asset. Have your elevator pitch down to three or four concise sentences. Ask each of the 10 people for specific referrals within their network. Also, very importantly, offer your assistance to help them solve a problem on their desk.
Next up, a bit about the Audit Chair role as independent director and the relationship to the CFO and other members of the Board.
As always, happy to chat about the next steps in your career or to give more tips on how to get on a board of directors. Visit our site for more information on how we can help CFOs or, if you would like to discuss the ideas in this blog further, please contact me at: Dave@arnoldpartners.com.
There are many qualities that my clients look for in a CFO. Obviously, significant experience and domain expertise in all things financial are high on the list. Some clients may focus on public company CFO experience or a specific industry may be more important at times. However, one quality EVERY company should demand in their executive leadership is gravitas. But how do you go about determining if a candidate has it?
Last week I attended a workshop on personal branding sponsored by the San Jose Business Journal and led by Karen Leland, principal of the Sterling Marketing Group. (Please see her contact information below.) Karen laid out six specific attributes that make up gravitas. Here’s how I describe it: gravitas in the corporate world is like statesmanship in the political world. It’s having the confidence and consistent performance that commands respect, and inspires others to move forward together. Some people have it, some don’t, and others can develop it.
Who’s Got It?
CEOs may say that they feel the gravitas of a person on an instinctual level. I have heard the phrase: so and so fills up the room with his or her presence. But it is much more than just presence; it entails several distinct attributes that can and should be evaluated in detail throughout the hiring process.
In a recent study by the Center for Talent Innovation, author Sylvia Ann Hewlett presents some fascinating findings on executive presence. Almost 70% of those surveyed respondents hold gravitas as the top quality they are looking for in their leaders. This calls out for a deep dive into understanding what it is, and what one do to strengthen this intangible and somewhat nebulous quality. If you are a CEO, CFO or aspiring C-suite professional, not only should you read Hewlett’s report, I recommend you take a personal inventory of the three key qualities identified in the study which lead to ideal executive presence: Communications, Appearance, and Gravitas.
I believe what holds back most people from the C-suite is oftentimes the lack of gravitas – not technical ability or political acumen. It can be evaluated by an expert interviewer if he or she knows what to look for, and what questions to ask.
I welcome your comments: what’s your take on gravitas if you are thinking about how to hire a CFO? I would love to converse on this capital topic.
To find out more about the process I use to evaluate a candidate’s gravitas and other qualities that constitute idea executive presence, please contact me, Dave Arnold at 408-205-7373 or firstname.lastname@example.org. You can also learn some great interviewing tips from my blog post How to Interview a CFO Candidate
Also, please look for a guest blog by Karen in the weeks to come here at Arnold Partners.
Karen Leland – Marketing/Branding/Content
This quote from the January 31 NY Times, “The company seeks the most accomplished and competent people for the job” is from a company spokesperson for J&J. It’s in defense of the hiring of Andrew Ekdahl to head their hip replacement business. The problem is that Mr. Ekdahl is lacking THE premiere quality of all executives and particularly CFOs: Job Integrity.
Ekdahl knowingly promoted the sale and implantation of faulty hips into roughly 100,000 patients. This is more than a slight slip up; it’s morally and ethically reprehensible. He may have been accomplished (good sales guy?) and competent (at lying?), but he certainly was not acting with integrity.
A definition that sets the bar
The definition of integrity is easy to find, but I like this one: a firm adherence to a code of moral values: incorruptibility (Merriam Webster). Other definitions use similar words like honesty, being whole, consistency of actions.
The question remains, how do we discover the true level of job integrity in another person? It’s pretty easy when you know someone over the course of years. It’s actually apparent when you play a round of golf with someone! But how do you flush this all-important quality out when you are considering them for an executive position in your company?
I don’t propose that the need for “high integrity” is not just for the CFO; in a perfect world, the entire C-suite and their direct reports would get A+ for integrity. I do maintain that because the CFO has a fiduciary responsibility (the bar in a capitalistic society), CFOs are naturally forced into deciding between difficult, competing interests on a daily and quarterly basis. So if you are an investor or head an organization, the number one quality you should look for in a CFO is job integrity.
There are many other qualities that one must consider in hiring a CFO, and I will cover these in future posts. If you want to know how the CFOs I consistently place with clients are screened for their integrity, call me, Dave Arnold at 408-205-7373.