Board Savvy March 17, 2016

The Inside Story on Board Service

By The Athena Alliance

Diverse & Deep: Words of wisdom from our Athena Alliance BoD Panel

In March 2016 we had the unique opportunity to host a deeply skilled and diverse set of leaders who sit in various board of directors (BoD) positions to get their inside stories on board service. Our amazing panelists which included Gerri Elliott, Sheri Anderson, Marilyn Nagel, Caroline Tsay and Debra Chrapaty brought to the table experience across the public, private and non-profit spectrum. Their collective experience includes sitting on boards such as: Bed, Bath & Beyond, Whirlpool, Puppet Labs, Rosetta Stone, Little Passports, Raley’s, Remedy Corporation, Imperva, Charlotte Russe, Watermark, UPWARD, nQuotient, and TravelZoo. Read on to learn what they had to share about the journey of getting on a board, and resulting responsibilities such as finances, lawsuits, and more.

How do public, private, and non-profit boards differ?

There is a tremendous amount of diversity across boards based on the type of company (public, private, non-profit), the size of the company, the stage, the industry, the leadership and more. Directionally, our panelists noted that public boards tend to be the most structured and focus on providing strategic direction and overseeing key areas of management such as compensation and audit. Private boards often meet more frequently than public boards and can be a bit more hands on in nature; particularly in smaller private companies. Non-Profit boards can vary tremendously and the nature of them will often depend on the size and maturity. Marilyn pointed out that the biggest difference with non-profit boards is you will typically be expected to support their fundraising efforts (versus public and private boards where you are typically compensated in some fashion for BoD service with cash/stock). Important note: all board seats come with fiduciary responsibility, even the non-profit ones, so pick carefully.

Are non-profit board seats a good stepping stone to private/public boards?

According to Marilyn, larger non-profit boards provide some similar experiences to serving on private/public boards though you don’t usually get “board” credit when it comes to your public board search. What you can achieve, however, is forming great connections if you pick the right non-profit boards. These connections can be great leverage points as you go on later to find a public/private board seat.

How do you increase your likelihood of getting on a board?

Across the panel there were a couple key themes: (1) be clear about your board “value proposition” (2) work your network – make sure everyone you know is aware you are looking and knows your value proposition. Other key words of wisdom: Carolyn reinforced the importance of being known publically by blogging and speaking at conferences and on panels. Gerri reminded us that while there are some exceptions, the “C” title matters. Gerri actually asked Juniper to change her title from being an Executive Vice President to being Chief Customer Officer because she knew the C-level title would open doors to expanded opportunities.

Should you engage your CEO/board in your board search?

Yes! Gerri pointed out that it is important to make sure your CEO knows you are looking for a BoD position and ensure s/he is supportive. You may find that your company does not support executives being on boards. The recommendation of the panel is to push back if this rule exists. Everyone agreed that being on a board can broader your perspective and make you a better leader in your current role. Your company may want to limit your board service but being on at least one board is great for continuing your education as a leader. You also should consider the powerful role that your own company board can play in your board search. If you are still looking for your first public/private board role, you can use your experience with your own board as a “bridge,” and the panel recommended seeking out opportunities to present/engage with them if you don’t already do so. Your own company board can also be part of the network you leverage in your search.

Lawsuits? That doesn’t sound good.

Unfortunately, board service does come with legal liability and you should go into your board service with eyes wide open. Doing your homework ahead of time is always important but sometimes there are things you can’t avoid. For example, Sheri shared how a company BoD that she was on sold to another company for a very good price. The BoD was dissolved after the sale was complete, but that did not prevent the BoD from being sued a year later. Fortunately they had followed due process and had Director & Officer (D&O) insurance so the story had a happy ending. Marilyn shared how she was on a couple non-profit boards that ran into financial trouble. On one of the boards the CFO was embezzling money. These are unfortunate situations but you can minimize your risk doing your homework in advance, ensuring that you have D&O insurance, and making sure you follow good process in the running of the board meetings.

What if I am not a financial expert?

The panelists suggested that if you are not a finance expert yourself it makes sense to take some classes and/or have someone help you. Stanford’s Rock center has a good director college for public and VC-backed boards (http://stanford.io/24YHklE). Further, it was suggested that most companies cover the cost of this training for their BoD members. What are other avenues for help? Debra has called on the risk committee of the company board she serves on to help her answered questions. Gerri has hired a financial tutor in the past to help her understand the financials for some of her companies. No matter how smart you are, there will be things that you don’t know and you should never be afraid to get help!

BODs are a two-way street

Always remember that when you are interviewing for a board seat, you should be just as aggressive in interviewing the company as they are with you when talking about the board relationship. All of the panelists stressed the importance of doing due diligence, getting to know the other board members and making sure there is good relationship fit. Gerri took us through her the key elements of her board search process, which included what questions you should be asking of yourself and of the other board members. There is a good accounting of Gerri’s more detailed search in her Fortune interview: http://for.tn/1vLQOyk. Additionally, some great questions to ask on Boardrooms: http://broadrooms.com. Sheri also highlighted some great training for private companies and angel investors via Golden Seeds: http://bit.ly/1SLiJMf.

A big thank you to our panelists:

  • Debra Chrapaty:

    BoD: KCG Holdings. Debra has years of experience managing and growing companies in the enterprise and consumer sectors. She is currently COO of Declara.

  • Sheri Anderson:

    BoDs: Little Passports, Raley’s, Remedy Corporation. Sheri runs the training program for the Silicon Valley chapter of Golden Seeds after many years as an information technology executive in financial services and high tech companies.

  • Caroline Tsay

    : BoDs: Rosetta Stone, TravelZoo. Currently Caroline is the Chief Digital Officer at Hewlett Packard Enterprise where she has P&L, strategy, and operational responsibility for the online channel.

  • Gerri Elliott:

    BoDs: Whirpool, Bed Bath and Beyond, Imperva, Puppet Labs and Charlotte Russe. Gerri is founder of Broadrooms: an informational resource for executive women who serve or want to serve on corporate boards. http://broadrooms.com. Over her career Gerri had leadership roles at Juniper, Microsoft and IBM.

  • Marilyn Nagel

    : BoDs: Watermark, UPWARD, nQuotient. Marilyn is Co-Founder of NQuotient and CEO of Ready-Aim-Aspire. Previously Marilyn was CEO of Watermark, Chief Diversity Officer at Cisco and has worked with numerous non-profit and private companies in advisory roles.