‘It’s Not About Who You Know Anymore’: On The Road To Board Service
“The smaller the company, the smaller the remuneration.”
Landing a seat on a corporate board can be challenging – but the opportunities have never been more robust for women interested in serving.
“It’s not about who you know anymore,” Christine Scheuneman, a veteran corporate director currently serving on the board of Farmers and Merchants Bank of Long Beach, told a packed audience this week at GlobeSt’s ELITE Women of Influence conference. “It used to be — but not now.”
Scheuneman and co-panelist Jennifer Litwak, executive director of Housing on Merit, outlined best practices to follow when pursuing board service opportunities, and cautioned attendees to stay away from pay-to-play subscription models that purport to help candidates nab spots.
“If someone says pay us a $2,500 a year subscription, don’t do that,” Scheuneman said. “You don’t need to do that.”
Instead, she recommends tapping into the capabilities of search firms, noting that BoardProspects database is a well-respected resource. Many companies who use search firms to round out boards will also seek to maximize the number of diverse candidates, she said, especially as institutional investors more thoroughly scrutinize how new members are selected.
The panelists also discussed what directors can expect in terms of time and compensation for board service, noting that both are factors that depend in part on the size of the company.
“Generally you can think about it as the smaller the company the smaller the remuneration,” Litwak said. “But in addition, there are also committees you’ll be asked to serve on, and sometimes there’s additional compensation depending on the type of committee.”
Litwak says would-be directors should ask themselves in board interviews how they feel about the people sitting across the table from them.
“You’re going to be spending 200 to 250 hours with these people, and you need to make sure it works for you as well,” she cautioned. “You want to be asking things like what are the committees, how often does board meet, and so on. Especially because you’re being paid, the expectation is you’ll make yourself available to the board.”
Scheuneman, a veteran corporate director, also focused on the duty of care and loyalty required of those serving on fiduciary boards.
“We’ve all heard about Theranos and SVB and others, and the question is always where was the board,” Scheuneman said. “It’s about paying attention to what’s going on and understanding your role as oversight for company. You’re responsible for that CEO and that C-suite. You’re really responsible for what goes on in that company.”
According to Scheuneman, a potential director’s “biggest obligation” is to ask“really good questions.”
“You want to test, ask, and really delve into things,” she said. “That’s part of your due diligence. It’s flattering to be asked to serve, but you have to step back and ask is this a board I want to be a part of.”
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