Can I build my Board Portfolio whilst a full time Executive?
For most executives the answer is NO...but it depends on how you look at it.
For a start most executive roles are full time roles and they don’t normally accommodate a parallel board portfolio. The board of the company where you are an executive rightly expects your commitment to them as your primary employer. That board also has an interest in ensuring any extracurricular activities are not in conflict, from a business perspective, and do not pose the potential for reputational risk or embarrassment. In light of the above, building a board portfolio of three or four roles is very difficult to achieve...and probably not desirable.
On the time side of the equation, the assumption is that board roles take up a lot less time than executive roles. When everything ticks along that is a fair assumption...when things are not going so well it is a poor assumption. When a company faces some significant shift in the business environment such as a takeover or merger, a dramatic fall in market value, an executive scandal or sudden shift in the regulatory regime it will be looking to the board for advice, guidance and strategy. So what do you do at that stage? Put your executive role on hold or resign from the Board? Neither of these are particularly practical approaches and neither of them will be well received.
So if you can’t really build a board portfolio whilst in an executive role how can you gain experience at the board level? The key phrase here is ‘board portfolio’ and not being able to build a portfolio does not preclude you from joining one or two boards. Most forward looking boards will encourage their senior executives to add a board onto their executive role. Why would they do that? For two reasons; firstly to provide a form of ongoing learning and development to their executives and secondly to help those executives appreciate the role of the board and be better aligned to their own board’s mode of operation.
One Chair I was speaking to said “You need to choose one track. Is it the Executive track or the NED track?” Apart from the time demands they were also talking about the difference in approach of the two roles. The ‘Noses in Fingers Out” approach of a board member is very different from the “Fingers all over it” approach of the executive. Some senior business leaders find those two roles difficult to. To be frank being a good executive does not mean you will be a good board director. Nor does it need to be seen as a natural progression with the alternative seen as ‘failure’.
Joining a board, maybe even two, is a very good way of helping an executive really come to grips with the role of the board. It is also an excellent way of understanding whether building a portfolio of board roles is the path you should be taking. Finally, if it is right for you, it is a base on which you can build further roles when the time comes.
A few tips for you if you are looking to take on NED roles in addition to your executive role:
- Make sure your contract allows you to take on board roles in addition to your executive role. Do that either when you commence your executive role or approach the Chair to have your current contract modified.
- Think carefully about potential conflicts before getting too far down the track with a specific opportunity.
- Not for Profit and Government directorships are more likely to be acceptable to your board than listed company NED roles.
- Make sure you keep the communication lines open with your Chair about any impending news that has the potential to surprise or embarrass them.
- If there is a director’s fee due from a board role be transparent about how that is to be handled.
On a final note
Taking an external board role, whilst still an executive, is beneficial (to both parties), common practice and should be encouraged. However, do not expect to build a board portfolio whilst you are in an executive career. It is unrealistic and will either cause you to over extend yourself as a director and/or not perform at your peak as an executive.
To build your portfolio apply the 4 Ps:
Pragmatic, Planned, Persistent and Professional.
Graham has been a Fellow of the Institute of Company Directors for over 20 years and leads the Board Practice at Watermark Search International.
A series of articles that look at some of the myths surrounding the building of a board portfolio and also provides some practical tips, from current Chairs, on how you might build your portfolio.
In case you missed it, read the first article in the series.