Coping with the Boardroom Talent Pinch
BY Ralph Ward
The search for good directors to serve on corporate boards has become tougher and tougher, a toss-up between opposing trends. The tide of mergers has freed up some good candidates, but tighter search criteria and greater job demands on top managers have prompted more "help wanted" signs in the boardroom.
John Johnson, who heads the board search practice for TMP Worldwide (the folks who run the hot Monster.com job search site), sees firsthand how these trends are hitting the search for board talent.
The recent Blue Ribbon report on the failings of U.S. board audit committees is rewriting the wish list for director searches. "We've seen a number of companies scurrying to find directors who came up through the finance ranks -- someone who comes from one of the big audit firms or who is a CFO." Companies particularly want high-level number crunchers to head the audit committee.
"Companies tell us that they want someone experienced in driving new technologies," particularly e-commerce. This means someone with board experience whose company is savvy with new technology -- but not necessarily the 25-year-old techno geek who may be an IPO millionaire.
Rejections of board membership offers by top talent is a serious problem that's getting worse. "More candidates are telling us they don't have time to talk, that they can't sit on another board." Beyond the raw time issue, CEOs and other prize catches are becoming choosier about their board slots as well. "CEOs are prizing their time more and are more likely to ask what this board seat can do for their own company," says Johnson. This means more selling on why a candidate should consider your board.
Naming foreign directors to the boards of U.S. companies remains mostly talk rather than action. "Everyone likes the idea, but then you get into the practicality issues. If you have six meetings a year, and that foreign CEO doesn't have some other reason for being in the U.S., he'll either be doing a lot of teleconferencing or missing meetings altogether." Also, though European companies today are much more likely to name pan-European members to their boards, this trend can actually make it tougher for U.S.-based boards to snare these talents. "If I'm a European CEO looking at board offers," says Johnson, "it's a lot easier to serve on a board based in Stockholm or Paris than one that makes me fly to New York."