I had the good fortune of being raised in a family that put a high value on educating the whole person. What I mean by that is that academics were really important, but more important was instilling a sense of curiosity about all things surrounding us: culture, spirituality, community, art, knowledge, and athletics—not as a viewer but as a participant. My parents were not focused on getting their nine children (of which I was number nine) into the most prestigious colleges, they were focused on educating the whole person and getting us ready for the excitement and vagaries of the world. To this end, my dad pulled off a great barter trade with the Woodside Priory School; he taught first period algebra in turn for our attendance at the Benedictine College Prep School. The school’s philosophy dove-tailed perfectly with that of my parents. We received an exceptional gift of a great education and a true head start in life.
Lessons learned from the Benedictine Monks
The school was founded by Benedictine monks who had emigrated from Hungry to escape the communist takeover of that country following WWII. We learned a great deal about all world religions at the Priory. Included in our education was some exposure to The Rule of St. Benedict, which in fact is sort of a playbook on how 8th century monks should go about their lives. St. Benedict was the founding father of the Benedictine order and had numerous rules for his followers, many of which still have practical applications today. One has stuck with me in business and life: To always “listen with the ear of the heart.” There are complete books written about what this means, but in my world, I apply it to serving my clients and candidates in the best possible way.
Non-listening Consultant Gets Shown the Door
I met with a new CEO client a couple of months ago who had recently engaged a retained search for a CIO. I asked him what he liked and disliked about that process. I was somewhat shocked by what he said. He told me the search consultant asked a lot of good questions of him, but the search consultant seemingly did not listen to any of the answers and direction given. For example, the CEO wanted the consultant to find a fresh slate of candidates for his company needs, not just re-use his existing candidates who were not hired in his last search. But this was exactly what the consultant did. Huh? The CEO decided to part ways with the consultant.
Listening with the Ear of the Heart
As a CFO and Audit Committee Member search consultant, I would argue that listening effectively to our clients and candidates is the most important thing a search consultant does. Second only to asking incisive questions so we can gather the truth and make excellent lasting matches. This all starts in my mind with “listening with the ear of the Heart.” I do not mean this in a religious way, rather just opening yourself up to the person speaking, having both empathy and sometimes sympathy for their words and experiences. It is not just taking notes and deciding what they really mean based on assumption. It is not just hearing and writing, it is looking for the meaning behind the words they choose. It is feeding back their words to make sure you really understand what they said.
During our discovery interviews with clients when kicking off a Board recruitment process or CFO search process we receive a lot of information. We circle back with the CEO after meeting her team or get back with the Chairman after meeting board members to make sure we listened deeply and understand clearly what the client needs and wants. Of course, we also chime in and offer guidance where there may be confusion or differences of opinion.
The CEO client I referred to earlier has an affinity for vocabulary and etymology, which I share. We got into some pretty funny discussions about words, where they come from, and the importance of choosing words thoughtfully when explaining ourselves and our companies. In writing the CFO specification for this client I was very careful to use many of the exact words he used in describing what he wanted in a CFO and how he characterized his company culture. This is listening with the ear of the Heart—listening and understanding the words and applying them to make a match between the management’s intentions and the intentions of prospective executive hire.
Making Matches that Last
Some of my recruiting friends say what I do must get boring, just placing CFOs and Audit Committee members. Au contraire. No two CEOs are the same, no two CFOs are the same. It is all in the subtlety of language, both verbal and non-verbal. The only way to make a good match is to really, really listen. Then take those words to heart and re-use them not only in writing a specification but in interviewing and presenting. This will result in a match that will last. I would argue that the only way to do that is to listen with the ear of the heart. Thanks Dad, thanks Priory, and thanks St. Benedict; our placed CFOs have an average tenure over five years! Now that is making matches that last.
If you are seeking a financially minded Board Member or CFO who listens deeply and delivers lasting results, thanks for reaching out to me at moc.srentrapdlonra@evad.
Last week I had the privilege of attending a panel discussion about Corporate Board recruitment and strategies for securing a Board seat put on by the Bay Area HR Executives Council, a SHRM affiliate. The event was well attended and the panel, comprised of two CHROs and an executive search consultant, was lively and informative. Here are some of my takeaways for those CFOs wanting to gain a Board seat and for companies thinking about recruiting Board members.
Considerations for Board Seat Seekers
First off, it was pointed out that there is a great deal of information available in the public domain about corporate governance and educating oneself on what it means to serve on a Board. I meet a lot of CFOs who want to be on Boards, but the panel wisely pointed out that careful consideration should be taken before committing oneself to a Board whether it be public or private. Basic questions to consider: Why do you want to be on a Board? What are the liabilities? What is the time commitment? What do you stand to gain? What do you have to offer? How long of a commitment are you signing up for?
A couple of resources were mentioned by the panel to help address these questions; shoot me an email at moc.srentrapdlonra@evad and I will share them with you.
Trends in Board Composition
One of the interesting trends taking place within public company Board recruitment is not only gender diversification (I wrote about this topic in a previous blog, “Gender Diversity on your Board of Directors and California SB826“), but also the diversification of professional backgrounds making up public Board seats. It used to be that Boards were made up almost entirely of current and former CEOs, but this is no longer the case. According to a report issued by Spencer Stuart, former and current CFOs made up just 12% of Board composition in 2017. The need for gender diversification today is hand-in-hand with the recruitment of more CFOs, CIOs, CMOs, and CHROs on to Boards as the issues public companies face become more complex and nuanced. The need for experts in a variety of subjects is now more important than ever before. One of the most talked about issues at Board meetings was the topic of “financial talent succession planning.”
So, this sounds like good news if you are a CFO wanting to join a Board, right? Well, the truth is, it is not easy. For one, there are only about half the number of public companies in the US today as there were in 1996. (According to the WSJ, in 1996 there were 7,322 domestic public companies and in 2017 there were only 3,671). Also, as the Baby Boomers go from being active C-suite employees to wanting to sit on Boards, the sheer size of that generation has created the largest number of competitors for those fewer seats. People currently sitting on Boards are generally loath to leave them for better or worse, making turnover rare. While some strategic and legislated elements are creating more demand for diversity of Board membership, clearly the demographic winds are not in a first-time Board member’s favor.
Are Companies Seeking a Purple Squirrel?
From the viewpoint of a consultative executive recruiter and Board of Directors recruitment firm, there is also more at play. When we partner with a Board and CEO to help attract a new member, the diligence process is very deep. We really need to understand the Board dynamics and what are the missing pieces to complement existing members. From there we reconcile with the Board and strategize on industry factors, competitors, foreseeable changes in the technical landscape in terms of bringing in fresh perspectives. We collaborate and determine a list of possible target executives on whom we should concentrate our efforts. Many times, this brings into play a “Moonshot” approach to attracting / recruiting Board members. My point is when we conduct a Board search, while there may be many prospective people who “want to be on a Board,” there are typically very few candidates who will meet all the criteria the client and I have laid out for the role. We are not, in the words of one panelist, seeking a “Purple Squirrel” but rather a candidate that meets a bar that is just high, specific, and written with purpose and thought, which limits the number of appropriate candidates.
Suggestions for Board Seekers
I am not trying to douse your dreams of being on a Board. The panel had some very good advice and insights on some practical ways to make yourself more attractive. One thing you can do is to seek an unpaid ‘Board Advisory” role. An incubator would be a good place to look for these roles. If you can land some Advisory roles they may grow into a more full-time Board role if the company is able to get off the ground. Another idea is to be an Angel investor; nascent stage companies might add you as a Board member/investor. Finally, look for those companies that may be a bit damaged or lacking in some key element where your skills and knowledge could help them turn things around. Just like anything in life, one rarely starts their journey at the top. You may need to take the “B” or even “C” role to get your first seat.
Finally, the panelists pointed out some of the qualities they look for when evaluating a potential Board member. First and most important was the ability to receive a tremendous amount of input from management and to be able to sort through it all and ask incisive questions. Second, they agreed that a high degree of business acumen in the domain of the business was key. They left us thinking about the role of the Board when it comes to social responsibility, which is becoming more of a conversation at the top than ever before. That is good news and certainly something for all of us to think about.
If your company is seeking a strategic Board member, particularly someone with a CFO background, Arnold Partners’ network is the one to tap for tech and life science companies. I welcome your comments and questions; contact me at moc.srentrapdlonra@evad.