Filling Board Seats Is Harder Than It Used to Be

To the general public, serving on the board of a major company seems like a dream job. Who wouldn’t want to get paid hundreds of thousands to go to a few meetings and listen to the CEO talk?

If you’re on the board of a major company, you already know that idea of a board member’s life is far from accurate. But you also may have noticed in recent years, serving as a board member has become more challenging — and choosing board members to fill seats can be an issue. 

Here’s a look at some of the issues plaguing boards today and how they impact current and potential board members.

“Overboarding” Is a Concern

Most board members hold a full-time position at another business. Some also have several other board positions. This isn’t new, but shareholders are increasingly voting against “overboarded” candidates due to concerns that they might be stretched too thin to be able to fulfill their duties.

For example, you might remember when X shareholders voted to remove Egon Durban from the company’s board. This happened after multiple advisory firms suggested that because Durban held seats on seven boards of directors, he might not be effective when it came to guiding X into its next chapter.

This move is generally wise — after all, when you’re doing something as important as directing a major company, you want to make sure you have the time and mental energy to do a good job. 

However, if you’re tasked with finding replacement board members, your job is likely becoming more challenging. Thanks to the push against overboarding, you might need to expand your search. Doing so may take more time and resources, but the upside is that it can bring fresh perspectives to the board.

Priorities Are Changing

A recent survey of more than 700 members of corporate boards found that board members’ confidence in each other is lower than you might think. Often, this lack of confidence comes because more established directors haven’t kept up with shifting corporate priorities.

Two of these priorities are cybersecurity and ESG (environmental, social, and governance issues). The survey found that less than half of respondents thought their fellow board members had an adequate understanding of both issues.

Regardless of how your board chooses to address it, this problem is bound to increase the workload. If you decide to keep your existing board members, you (or they) may need to invest considerably more time into gaining a better understanding of these growing concerns. 

Both ESG and cybersecurity are intricate issues tied to both a company’s security and overall profitability. 

For instance, maintaining secure digital records and following corporate regulations are vital parts of maintaining a functioning business. 

Additionally, as more customers are choosing to support companies that take certain stances on social issues and take steps to become more sustainable, the board’s understanding of ESG can directly impact a business’s long-term success.

If you choose to remove these members and vote in new ones, you’ll face a different kind of workload — the arduous process of seeking, interviewing, and voting on potential new candidates.

There’s a New Focus on Diversity

In the current social climate, most boards are placing a premium on electing members from diverse backgrounds. Women and people of color tend to be in particularly high demand. Often, finding a suitable board member is a challenge regardless — and when you narrow the field to only women and minorities, the process becomes even harder.

Experts in New Technology Are Hard to Find

Many companies only elect to expand their boards when there’s a pressing need for it. For example, AI’s lightning-fast development is already altering the way businesses in nearly every sector operate, but few people truly understand how AI works and how to apply it to an existing business model. 

This means that many boards — maybe yours is one of them — are searching for AI experts to join the team. 

However, there’s one major problem — AI is so new that there aren’t many existing experts. That creates a bidding war between companies looking for an AI expert, and often, you have two options — pay an exorbitant annual retainer or do without.

If your board is stuck waiting for more AI experts to develop and appear on the horizon, you may have to address AI-related issues on your own, which can dramatically increase your total workload.

Revamping a Board Is a Delicate Operation

There’s a lot of talk about bringing new blood to existing corporate boards. However, when it comes to actually bringing in new talent, things get a little more complicated. 

Many established boards have members who have served for multiple decades. When these members become out of touch with the current corporate climate, broaching the subject of removing them from the board can be extremely difficult. 

When a member has an implicit seniority, newer board members are often reluctant to suggest they leave.

Of course, there’s another option. If you don’t want to get into the difficulties of voting out established members, you may also choose to expand your board. It’s entirely possible to add new members without removing any existing ones. 

Expansion might sound like an easy solution, but keep in mind that the larger your board becomes, the harder it is to manage. Before you go this route, you should carefully consider your board’s existing size and whether it makes sense to add a new member or two.

Dealing With a Changing Business Landscape

Serving on a board of directors was never as cushy as popular culture made it out to be. But as new challenges affect more boards, you’ve likely found that serving on a board is more time-consuming than ever.

However, there’s some upside to the difficulties boards are facing. Because recruitment has become more difficult, boards need to go beyond their personal networks to find worthy members. You might find that diverse perspectives enrich the rest of your board in a way you hadn’t thought possible before.