How Long to Get a Board Seat?

A fascinating stat somewhat buried in the 2010 Board of Directors Survey recently released by Heidrick & Struggles and WomenCorporateDirectors (WCD) is this —

• It takes women about 2.4 years to achieve their first board seat once they start actively seeking a corporate directorship; the comparable "time in search" for men is 1.4 years.

The one-year difference in male-female board seating is an interesting story in itself. But my reaction to this statistic is this: Call me just a tad skeptical.

I say that based on years of anecdotal reports from close readers of Directors & Boards who have written and called me for counsel on the best ways to be considered for a corporate board. My sense from these interactions is that it typically takes longer — sometimes a lot longer — than the 1-3 years cited in the survey.

Here is one such seeker, who emailed me this note about a year ago:

When I turned 50, I felt like I had enough experience to add value to a public board of directors. I had served on private boards, and had also briefly been chairman of a public company. I want to serve for a public company. I joined the National Association of Corporate Directors, and began soliciting smaller public companies to serve on their boards. I even solicited pink sheet companies. I solicited private equity firms to serve on the boards of portfolio companies. I signed up with headhunters, and Nasdaq Board Recruiting. In the last several years, I have sent my CV to hundreds of people, and made hundreds of telephone calls. I have been in the running, but so far no board positions.

I did not have much to offer to this fellow — and it was a man who wrote this — other than to say that it seemed to me like he was doing all the right things. I passed along a few keen advisories on "How to Get on a Board" that Directors & Boards has published, and also planted the idea that one thing he might consider to raise his profile is to do some writing on leadership issues for us and other prominent publications.

But after receiving notes like his, and reading and hearing many similar stories of the frustrations in trying to crack the code of the director selection process, you can see why this particular stat jumped out at me. I am tempted to do some further fact finding on this. Stay tuned for that in Directors & Boards in 2011.

This board survey, overall quite impressive in its findings, is recommended reading for both present board members and hopeful candidates, and can be accessed on both the WCD website and the Heidrick & Struggles website.

Pictured is Susan Stautberg, the enterprising co-founder and co-chair of WomenCorporateDirectors, an organization that describes itself as "the only global community of women corporate directors."

Show of Support for Gender Quota on Boards

The majority of directors, both men and women, do not favor a gender balance quota on corporate boards. That is one of the major findings in a survey of nearly 400 male and female board members done earlier this year. The results were released on Oct. 6 at a briefing at the 21 Club in New York. The survey was conducted by Heidrick & Struggles International Inc., WomenCorporateDirectors (WCD), and Dr. Boris Groysberg of the Harvard Business School.

Now, here is who supported diversity quotas for boards: 25% of the women directors. And for the men? No surprise that it is a number that barely registers on the meter: 1%.

There were many other important findings that came out of this survey, which I will be citing in my blog and in Directors & Boards as time goes on. But this is the story that was buried in the overall report: That one-quarter of the women directors favor a board gender quota is an astonishing show of support for this controversial tactic.

This quota finding hits the market just as the new edition of Directors & Boards comes off press with our major examination of board gender balance and the pros and cons of a gender quota (front cover pictured).

A lead article offers up a Norwegian minister who walks the reader through his country's thinking on legislating a gender balance board quota and the process of how it got there — i.e., from women holding 7% of board seats in 2003 to today's mandated representation of 40%. That is quite a tale, one that is getting worldwide attention, providing the template for other efforts to institutionalize a quota system or contemplating a move in that direction.

Another article in this new edition takes our own informal poll on whether to mandate a board gender quota in the U.S. We asked a select group of directors, recruiters, and governance experts to write a brief essay attacking or defending the concept. Interestingly, that roundup of opinion mirrors the Heidrick/WCD survey.

"It is interesting to see in the survey and in our conversations with women directors around the world how the idea of quotas is gaining traction," says Alison Winter, co-founder and co-chair of WCD, which has over 700 members serving on over 850 boards in 27 global chapters. Look for more traction as this survey and the new issue of Directors & Boards roll out over the next few weeks.

Why Does Succession Planning Produce So Few Successors?

As noted in the blog posting below, that is the question that Heidrick & Struggles Vice Chairman Stephen Miles (pictured) has wrestled with. In October 2009 he issued an advisory that identified three "common roadblocks," as he called them, that "sabotage effective leadership transitions at companies."

The Hewlett-Packard board's ouster last week of CEO Mark Hurd prompts a fresh focus on these roadblocks. Here is how Miles has described them:

• Favoring the 'exciting' external candidate over an internal option: "It appears boards often prefer the devil they don't know to the devil they do. They often find it difficult to imagine an internal candidate in a higher role after seeing them operate for a time in a lesser one. Internal candidates will hear time and time again that they are still 'one or two years away' from being ready, while they watch their external 'competition' being lauded for similar efforts."

• Demanding a 'ready now' successor: "The concept of a 'ready now' executive effectively eliminates perfectly viable candidates from true consideration. The fact is that a company would only know that someone is 'ready now' after the fact — when they see the executive moving to another company, probably a competitor, and proving himself there. The candidate might have been ready to lead all along, but the company missed its chance. This is actually a risk management decision — and the amount of risk a board can take is dependent on the requirements of the role looking forward combined with the complementarity of the top team."

• Focusing on the high-profile CEO role and not on the whole team: "The best succession planning really involves constant assembly and re-assembly of a leadership puzzle with many pieces, including not only the CEO but the CFO, COO, sales and marketing chiefs, and other C-level officers. A trend we are seeing in the best-managed companies is that boards are looking beyond the CEO and his or her direct reports. Now boards want a detailed calibration of the C+2 and C+3 executive populations to see who's 'on deck' to take the reins down the road. Again, from a risk management perspective it is important to understand the bench strength and resulting strength or risk in the 'people portfolio.' "

Miles, who oversees the Heidrick & Struggles worldwide executive assessment/succession planning activities, also made an observation in this advisory of more than nine months ago that eerily presages the precarious position that the H-P board got itself into — if indeed it must look outside the company for its new CEO:

"Boards can, and really must, direct succession planning with an honest evaluation of current talent and the development of a rich pipeline of talent that can form the future of the company. It is this kind of forward-looking, proactive leadership that can mitigate risk and maintain confidence among internal and external stakeholders."

Into the Abyss

There is so much that is distressing in the sudden forced resignation of Mark Hurd (pictured) from Hewlett-Packard.

The distress level is so high because there is no reasonable explanation for the personal tragedy that unfolded. A man living a life of accomplishment and acclaim falls in a flash into the abyss of disgrace. And those who are in the know about why and what really happened aren't telling.

Of all the reporting and analyzing that I have read since Friday's ouster, I suspect Business Insider's Henry Blodget gets pretty close to the truth with this review of the situation — but he even has to qualify that his truth seeking is "as best we can tell."

As the shock wave of the ouster subsides, here is the next reason to be distressed about this whole affair: the early line seems to indicate that the H-P board will be going outside for a new CEO. For a company with such a history of turmoil at the top (even predating Carly Fiorina's reign), the H-P board should be one of the least likely to have yet again bungled an orderly CEO succession by not ensuring there was one or more eminently qualified internal candidates.

Why does CEO succession planning produce so few successors? That is a question that Stephen Miles, vice chairman of executive search firm Heidrick & Struggles, raised last year when he looked around at Corporate America's C-suites. Then crunching 2008 data, this expert in leadership succession issues noted that of the 80 new CEOs who were appointed among Fortune 1000 companies that year, only 44 of them — 55% — were promoted from within.

"While almost all companies technically have a succession plan in place," Miles stated, "the fact that 45% of them had to go outside to hire a CEO means that many of these plans failed to hit the mark."

He has pinpointed several ways that boards trip themselves up, which I review in the follow-on posting of August 11th. Will we see clues to how H-P "failed to hit the mark"? (No wordplay intended.) Almost surely.

Now that we have witnessed a CEO falling into an almost unimaginable personal abyss, we are about to witness a board falling into the abyss of a succession nightmare — one that, maddeningly, is all too imaginable.

Don't Underestimate the Value

I always like to see good things happen for Directors & Boards authors, especially when good things come in pairs. So congratulations go out to Bonnie Gwin on being named chair of the Make-A-Wish Foundation of America. Gwin is a managing partner of the executive search and leadership advisory firm Heidrick & Struggles International. Earlier in November came the big news that she was tapped to lead the firm's North American Board Practice.

"Over the last four years I have had the distinct privilege of serving as a member of the Make-A-Wish national board, an organization that brings hope, strength, and joy into the lives of countless children and their families each year," Gwin said upon the announcement of her new leadership post. "Being named chair of the board is both a profound honor and a great responsibility, one that I take very seriously. I look forward to this new challenge and to helping the Foundation continue its important work, as it enriches lives and fulfills dreams for those who need and deserve it most."

Quick cut to a corporate board pointer. In 2006 Gwin co-wrote with Heidrick colleague Anne Lim-O'Brien a substantial advisory on women on boards. We titled it, "So Many Public Companies, So Few Women Directors." Among the issues she addressed in this analysis of how to increase the number of women on corporate boards was The Nonprofit Factor. Here is what she had to say about that:

"Today women are more likely to win board seats in the nonprofit sector than in the corporate sector. But the women we met were fairly divided on whether their nonprofit work served as a springboard to corporate boards.

" 'I've been on nonprofit boards for 20 years, but that hasn't helped me get on a public board — it's not a direct path,' one woman said. However, many others argued that the value of serving on nonprofit boards shouldn't be underestimated.

"With more nonprofit boards being held to Sarbanes-Oxley standards and adopting a public company-like operating structure, the nonprofit sector could become another important feeder for public boards. In any case, we found that nonprofit board work was a tremendous source of personal satisfaction for the majority of women we met."

With her new commitment to the Make-A-Wish Foundation, we have a compelling example of a consultant following her own advice. Congratulations, Bonnie.