The latest Australian Institute of Company Directors Board Diversity Statistics report (November 2022) revealed that 35.7% of ASX 200 board members are women.
Interest in joining boards as a Non-Executive Director (NED) is clearly rising among talented women, but for many of us, it isn’t always clear where or how to get started.
After participating in an initiative developed by a group of insightful women at the University of Newcastle about all things related to board recruitment, I have put together the following guide about board skills matrices, understanding your own strengths, how to build advocacy and get noticed, and some practical steps for starting your journey towards becoming a NED.
But first, why is it important?
Having diverse board membership has several benefits both for organisations and for participating female NEDs.
Organisations enjoy several benefits from having more women on boards:
Benefits for the individual include the chance to enhance your prestige and credibility, develop leadership skills, grow your network of talented and ambitious people, learn how other businesses operate (and apply those learnings at your own organisation), and know that the decisions you make have a real impact.
Just like a head of recruitment works to understand the skills their organisation currently possesses, identify the gaps and forecast future requirements, many boards use a “skills matrix” to profile their directors’ skills and experience.
A board’s focus is usually to ensure adequate coverage across the technical skills relevant to the organisation’s purpose and strategy – for example, executives with deep skills in legal, HR, technology, digital transformation, governance or risk could be highly valued at board level. But boards are increasingly looking beyond hard skills to consider “soft” skills such as communication, strategy development, problem solving and conflict resolution.
The good news is that boards are actively seeking talented women, along with several other types of diversity – age, cultural background, linguistic, neurodiversity, socioeconomic diversity, and more. Don’t hesitate to use any intersectionality to your advantage when applying for board membership.
Once you’ve understood what a board is looking for, the next step is to know yourself. Be able to clearly articulate your hard skills and experiences, along with the soft skills you bring to the table. When someone asks you what you might bring to a board, frame your answer in a way that speaks the language of a high-performing board.
There are several avenues to preparing for a NED role. Many choose to gain experience by sitting on a non-profit or government board. Advisory boards and involvement in committees is another avenue to gain experience. The Advisory Board Centre reports that advisory boards are on the rise. “Since 2019, there has been a 52% increase globally in organisations utilising advisory boards as part of their governance structure,” says their State of the Market Report 2022. The research indicates that global uncertainty, volatility and individuals wanting to contribute at board level but reduce their personal risk is in part responsible for the shift to advisory.
Others pursue corporate roles to gain experience that will be valued by a board. For those looking to expand their knowledge, build a wider board network and gain a recognised board accreditation, the AICD Company Directors Course is a popular and credible choice.
We are still in an environment where people find board opportunities based on “who you know.” The overwhelming majority don’t go looking for their first board role: rather, someone from within their network reaches out to them to see if they are interested. For those looking to build a board career, it is important to invest in your professional network, add value to your industry, participate in thought leadership and manage your public profile. Specific strategies include engaging in public speaking, joining industry events/panels, building your network and connecting with other board members, improving your social media profile (executive search firms will be looking for LinkedIn visibility), publishing research or thought-leadership, and collaborating with other experts. Doing the AICD course can also be a great way to start building a valuable network.
Executive Search firms also take on board recruitment projects and it is important to develop relationships with those firms.
Research is vital because directors will be held responsible for decisions made during their term in office. Make sure you do your own due diligence rather than relying on assurances from others.
Use the resources available at ASIC for your research, such as obtaining company documents such as its constitution, financial statements, changes to officeholders, and more. You can also purchase a record of someone’s directorships and check the records of anyone who might be a disqualified director.
Finally, think about whether you are a good fit for the organisation. Ask yourself:
A powerful question to ask yourself before joining a board is: “Would I invest significant amounts of money in the organisation?” If you are unsure about this, you need to do more research or consider opting out.