Serving on boards is not only an altruistic endeavor; it's also a powerful way for entrepreneurs to build their businesses. Here's how to make it work.
I sit on several great boards and recognize that my contribution is a powerful path to building long-lasting relationships and financial gains for my business. The chance to learn from, actively connect with, and contribute to, an organization's mission, are all valuable to me. Serving also helps me get into the minds of people who provide oversight for and input into my company--my advisors, investors, and key clients.
However, any board worth your involvement probably means sacrificing time from other meaningful areas of your life. So whether you already serve or are considering serving on a volunteer or paid board, here are some tips to consider when making the choice.
First, consider that every board is different.
Volunteer Boards For the past two years, I have served on the Harvard Business School Alumni Board, which has been an amazing experience: I learn about exciting new initiatives before the world does and have met some of the most extraordinary people in my life, from ministers of defense to game-changing entrepreneurs. However HBS, like most nonprofit boards, is volunteer--according to a survey by BoardSource, only about 3% of respondents reported compensating nonprofit members--usually for particularly complex nonprofits, like foundations or health care systems.
Paid Boards Serving on corporate boards can offer great benefits--including the nice perk of compensation. In its 2011-2012 Directors Compensation Report, the National Association of Corporate Directors found that median 2011 director pay ranged from approximately $96,000 (micro companies) to $230,000 (top 200 companies), usually with a mix of cash and equity. As would be expected, while there are legal protections in place, there are also several personal liability risks that directors must consider--lawsuits, new guidelines for cyber security, more government investigations and enforcement, a new whistleblower program, and more.
Regardless of whether you choose volunteer or paid service, undertakings that waste time and money are kryptonite for successful entrepreneurs--Don't touch! So before committing, ask yourself the following questions about the board you're considering joining:
Will your service make a difference?
Is there a clear process for sharing information, and open lines of communication among the board, management, and constituents?
Do you understand all of your roles and responsibilities? Serving on a board isn't just a "feel good" opportunity. You have specific roles and responsibilities, including legal, fiduciary, and ethical ones. Understand what you're signing up for. Organizations such as Corporate Board Member, BoardSource, and Bridgestar have resources that can help.
Is the board composition diverse? Empirical data suggests that the fundamental economic reason for a diverse board is that it's more capable of seeing and understanding risks and coming up with robust solutions to address them.
And most importantly: Will you have fun with your fellow board members? Remember, you're not only sacrificing time you could have focused on your family, business, or self, but also in the case of volunteer boards, you may even be covering the costs associated with attending meetings.
At this point you might be thinking, "great advice, but let's back up--how do I even get on a board?" Start by letting folks know that you are interested!
Similar to a job search, ask around, update your professional profiles to indicate that you are interested in board opportunities, and consider which organizations you already are connected to. If your goal is to serve on the board of a Fortune 500 company or prestigious nonprofit, first serving on a smaller board can be a great pipeline to gain the credentials and contacts that will make you most attractive for these positions.
If your time is limited, it's likely not wise to choose a "growing" board where members' roles may mimic those of staff. Conversely, if you want to get your hands dirty, a more "mature" board might bore you. Regardless, just make sure that you're comfortable with the level of commitment required.
It's an honor to be asked to join a board, particularly a prestigious one. However, if you don't have the time or desire to serve, you should step back and do everyone a favor--and decline. If timing is the issue, make sure that the board and staff know that you are interested so that they can consider you for future board terms.
When approached astutely, board service offers a chance to personally connect with an organization's mission, get to know other influential people, and raise your profile as an expert and as a game changer.
I hope your board service is rewarding as mine has been. Let us know in the comments about your best board experiences!