Corporate Boards: What You Need to Know Before Joining One
CIOs are increasingly eager to put their business strategy and governance knowledge to good use by serving on external boards of directors. Their reasons -- personal and professional growth and benefits to their companies -- are well founded, according to TK Kerstetter, president and CEO of Board Member, which publishes Corporate Board Member magazine.
For CIOs, "there is probably no better training than board service to understand all of the challenges that a business has to deal with and to learn about other industries," he says. "CIOs can then take this enhanced knowledge back to their current jobs and organizations."
That's how it played out for Jeff Steinhorn, CIO at US$31 billion energy company Hess. Steinhorn serves on two university boards, primarily as a give-back opportunity. "Being on these boards has opened up a new personal network for me-my fellow directors are CEOs, CFOs, consulting firm partners and other business leaders," he says. These contacts have been a valuable resource that Steinhorn has tapped with his own business-related questions. His board relationship with the universities has also paid dividends in talent recruitment. "Professors know who I am and often contact me or have their top students reach out for job possibilities," he says.
But board directorships are not always bonanzas for CIOs and their companies. They can be disappointing and draining experiences if you don't go in with clear and realistic expectations. CIO Executive Council members participated in a survey on their board experiences in August 2008, providing several caveats for those seeking a seat in other companies' boardrooms. (Download the results from the Connect box at council.cio.com.)
Gauge Your Commitment
The decision to join a board, and your ultimate satisfaction with the experience, depends on two factors: your passion for the organization's mission and the time you can afford to commit.
Most CIOs aren't prepared for the time and energy their commitment will actually consume. Sixty percent of CEC survey respondents complain that board service is "too draining on their time and energy." Tim Young, vice president of IT at Bright Horizons Family Solutions, made it a priority to understand the time commitment prior to accepting his director position at a private Christian school in New Hampshire. "I take it very seriously and wanted to make sure that I could give 150 percent," says Young.
On average, CIOs spend 18 hours per board per quarter, including meeting, prep and travel time, according to the survey. Monsour spends between 80 and 100 hours total per quarter on his four boards. He feels the time crunch most at fiscal year end, when he must sign documents for multiple organizations that are geographically spread out.
Strut Your Business Stuff
CIOs bring both technology knowledge and strategic business leadership to the table. Young has found that show casing his business acumen in the public setting of a board is a great way to demonstrate that a CIO is more than just a technologist. Indeed, the chance to flex their business strategist muscles is the chief personal motivation CIOs cite for joining boards, followed closely by the opportunity to gain exposure to board-level corporate oversight processes.
Yet, the board's perception of the CIO role may be at odds with your own view of your potential contribution. Michelle Beveridge, CIO at IDP Education and a director on four boards, has had to teach some how best to use her skills. "I constantly emphasize to other directors that I am chief information officer, not chief technology officer, and that information-whether it's accounting, financial or business strategy-is what a business runs on," she says. A quarter of survey respondents complained that the boards they serve on underutilize their contributions and involvement.
Be the Governor, Not the Manager
Another major adjustment you may have to make as a director is a shift from a practitioner mind-set to one of governance. It's one of the biggest board frustrations, according to Butch Leonardson, senior VP and CIO at credit union BECU. "I know I can do the job, but in the end it's not my job to do," he says. "I have to remember that my role as a director is one of governance, not management."
Despite the challenges, Kerstetter is confident we'll see an uptick in CIOs serving on outside boards, especially as more are named to their CEO's management team. Technology is clearly a competitive business strategy for organizations, he says, and having this expertise in the board room is a huge asset.
How to Land a Board Position
For those CIOs who seek to serve, there are several ways to go about snagging a board position. More on CIO.com Joining the Board of Directors CIO Advice for How to Get on the Board of Directors
Personal networks: Personal networks are the most common paths to board opportunities, according to the CIO Executive Council's board survey. Butch Leonardson, senior VP and CIO at credit union BECU, serves on two boards: his alma mater Seattle University and a regional medical center. In both cases, he was approached to serve via his personal connections.
"Once you are on a board, your name is out there in annual reports and other collateral," Leonardson notes. "You become part of the 'board network,' which brings new opportunities with it."
Executive search firms: IDP Education CIO Michelle Beveridge used an executive search firm to find her board appointment, a common practice in Australia where she is based. The search firm matched her with a paid director position for the Historical Queen Victoria Women's Center, a government body where she has served for nearly two years.
CIOs who have had non-IT experience, particularly P&L management, are attractive recruiter candidates for board positions, says Kerry Moynihan, managing director at executive recruiter ZRG. He notes that the bad economic times may be a great chance for CIOs to nab board positions since companies are often more focused on operational efficiency and may see a CIO's experience with process optimization as suited to that need.
Formal board networking events and classes:Beveridge took advantage of formal networking events and attended a corporate governance class through the Australian Institute of Company Directors. A list of U.S.-based programs can be found at Change Leaders, a board-and CEO-training company.