Last week’s Fortune Magazine ran an article called Lessons of the Fall. In it several big- time CEOs were asked what they learned from their highly publicized firings. As one reflected on his Board of Directors, he observed, ‘looking at the company through a little hole once a quarter at a four-hour meeting - board members don’t know much about the company’. This is a comment we hear a lot.
In the past year, we have seen a dramatic increase in our board-related work. This is a noteworthy shift since start-up boards in Canada have historically been investor dominated private clubs. As one investor once lectured me, “the need for outside board members is nonsense. Think about it, what adds greater value, some operator with the narrow perspective of a few operational gigs or someone like myself who sits on a large number of boards and is able to observe them all”.
Several tectonic shifts have challenged the prevailing wisdom or hubris. Sorbannes-Oxley and other governance changes have removed the phrase “I did not know” from the board vocabulary. It is now expected that board members know what is going on in the organizations for which they are responsible and many portfolio manager investors simply do not have the expertise to drill down. They now need board members who know the questions to ask and even better, the right answers to those questions.
Accompanying the push into independent board members is the pull for supplementary expertise. It may be the gray hair of an executive who has lived the company’s future and can apply that wisdom to help the firm avoid the many potholes before it. It may be someone with specific customer intimacy or contacts in markets important to the organization. It may be someone who can gain the confidence of the CEO and act as an advisor/mentor. It may be someone with experience building an organization via acquisitions who can share lessons learned with the management team. It may be someone who could serve as a potential successor to the CEO, or it may be someone, who by virtue of joining the board, adds a certain cachet to the organization.
One interesting trend is that firms are reaching one level down to add highly skilled functional executives to their boards. This is underutilized yet holds considerable promise. Here, organizations attract to their boards a VP of marketing or sales or engineering with an impressive pedigree. The quid pro quo of this strategy is compelling. The up-and-comer gains valuable experience and a board notch on their resume. The company gets highly specialized, current expertise on their boards and an individual who may well be willing to devote more time to their cause than a busy CEO who sits on multiple boards already. While the learning curve to becoming an effective board member may be higher, for many organizations it is a risk worth taking.
An Abject Failure in Due Diligence and Judgment
August 10, 2010
There are few shortcuts when it comes to hiring senior-level executive talent. And when firms are not careful, the price they pay can be exorbitant. Consider the true story of a company that paid a big price.
One Reason Interviewing Candidates is So Difficult
July 13, 2010
I was browsing in my local bookstore on the weekend when I came upon a small book titled ‘Toughest Interview Questions'. Always interested in this subject I quickly leafed through it and put it in the pile to buy.
Strategies for those wanting to make a career or sector change
June 23, 2010
Many transitional executives contemplate career changes. It may be a career auto or general manufacturing sector executive questioning its future, or a large-company type who covets the chance to work in a smaller organization. Often, it is simply individuals longing to shed unfulfilling careers for exotic destinations as yet unknown.
Executives in Transition- Why a rifle beats a shotgun in nabbing that perfect job
June 21, 2010
As a headhunter I am an obligatory stop on the networking circuit of many executive job seekers. I hold the promise of a barometer on the employment market, contacts, ideas, and even suitable ongoing searches. I am always happy to participate in courtesy interviews as I neither envy the job seekers' circumstances nor take lightly their courage in reaching out to me.
The Perils of the Successful Matchmaker
June 14, 2010
What is a successful matchmaker?
Last week, the Wall Street Journal published an interview with Patti Stanger who runs The Millionaire's Club, a Los Angeles-based "elite" matchmaking service and reality television program.
Interviewing: The Quest for Patterns and Themes
May 14, 2010
Last week, two seemingly unrelated articles caught my attention. The first was a magazine obituary on C.K. Prahalad, the management thinker best known for his work on core competencies. The article spoke extensively of his ‘big ideas' and noted his habit of traveling the world "prying useful information out of everyone he met…always looking for connections and patterns, hoping to predict change".
Checkers vs. Chess: Why Candidates Play The Wrong Interview Game…and Pay the Price !
May 4, 2010
I often join my clients when they conduct candidate interviews. I moderate, participate, listen and learn. They are fascinating glimpses into how candidates and companies alike play the complex game of talent acquisition.
The superhero hiring game and why everyone loses
April 5, 2010
When it comes to recruiting leaders, companies continue to search for those Steve Jobs-like characters that can single-handedly turn around a company's fortunes, blaze paths of innovation and market their wares like no other before them.
Why candidates should expand and prep their references
February 3, 2010
As headhunters scramble to match candidates with their shapeshifting clients, process and painstaking due diligence rule the day. To some candidates such rigor may feel intrusive or simply unnecessary. It shouldn't. In fact, rigor should be embraced and used to all candidates advantage. Consider the use of references as an illustration.
The Unwanted CEO Job …and the one individual who thought otherwise
January 8, 2010
Several recent articles have lauded the success of Ottawa-based Bridgewater Systems. With skyrocketing revenues, a growing market, and money in the bank, the firm's prospects have never been better and the street appears to love the story. It was a much more difficult story to sell in 2003, with one notable exception.
Board Recruiting Trends
May 1, 2008