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Feature

Ann McLaughlin Korologos
Corporate Director

On Getting on a Board
First, some wrong-headed notions need to be put aside in your pursuit of a directorship.

By Ann McLaughlin Korologos

The initial reaction to the question of “How do I get on a corporate board?” might be “Why would you want to?”

Why on earth would anyone of sound mind be interested in serving on a corporate board in today’s anti-business, regulation-infested, over-taxed, anti-globalization, protectionist-minded, constantly investigated, negative-headline-filled governance environment?

Stop and think. Regulators are telling us how much cream to put in ice cream, how to mow our grass, how to place baby seats in cars, how many raw eggs to put in a Caesar salad, how to drink our beer, and how many girls have to play on basketball teams. And corporate boards, beholden to moody large and small shareholders, must answer the question “Why are my dividends down?” at hugely public annual meetings where analysts scrutinize every utterance.

Yet people are still clamoring to get on corporate boards.

In starting your pursuit of a directorship, bear in mind some important factors that need to be put aside at the outset:

• The "Prestige" Factor: Board service is a lot of hard work. It is not a social club. You don’t join a board for prestige; you will be expected to work hard. There are significant fiduciary responsibilities and significant liabilities. Prestige can turn into a nightmare when you hit bumps -- or a crater -- over regulatory challenges, a soured acquisition, inappropriate or illegal executive behavior, and the like.

• The “Get Rich Quick” Factor: You don’t join a board for the money. Clearly, if a company does well and there are stock awards and significant stock ownership for directors, wealth creation for all shareholders is being achieved. But it is not a sure thing. In fact, an extraordinary amount of time spent over a bad patch in CEO succession or an acquisition gone awry may put your board fees lower than the hourly minimum wage.

• The “I Was an Important Member of Congress/Government or Former CEO and I Deserve It” Factor: Don’t join a board in the belief that you can run the show; the CEO runs the show. Using your experience can bring you great success, but you also need to understand that there is a lot you don’t know. Unless you want to learn, unless you want to work hard, and unless you feel that you will be joining people you like and respect, I would not assume your former or present importance will be a good fit with a board.

Decide early in the process what you actually can contribute to a board, to a corporation, to the shareholders. Could it be your education? Your financial skills? Your experience in business and other achievements that are being seen as adding value? You might be successful in one business or one area of life, but this may or may not transfer to your success as a director. So assess whether your skills are a good fit with those the board and the company need.

Whether you have been recruited by a search firm or a board member, presumably the board and management have set forth some requirements for background and experience. Make sure you know why a board wants you. If it can’t be defined, beware -- or lower your expectations.

Then ask yourself if you are committed to being part of sincere board oversight in questions of integrity and character and can help management to stay focused on them.

Once you have gone through the process outlined here and have honestly made up your mind that you actually -- without bias or an overheated ego -- can contribute something to the well-being of a company, you are halfway there.

Now, how are most directors chosen? Obviously, many are nominated by friends on current boards. And many boards use search firms.

So, in short, make yourself known … show your bona fides … but do so with this in mind: If you have an impeccable sense of integrity, character, and personal values; a solid, outstanding record of accomplishment wherever you have worked; and a high level of competence reflecting your education, continuing learning practices, range of experiences, and level of personal growth, then keep these in the forefront.

Chances are that if you do well at what you are doing, someone, somewhere, will take notice and recruit you to a board.

Ann McLaughlin Korologos, a former U.S. Secretary of Labor, is senior advisor to Benedetto, Gartland & Company Inc., an investment banking firm in New York. She is chairman of the RAND board of trustees and former chairman of the Aspen Institute. She currently serves as a director of several corporations, including AMR Corp. and its subsidiary, American Airlines Inc, Fannie Mae, Harman International Industries Inc., Kellogg Co., Microsoft Corp., and Host Marriott Corp., and is involved in many other distinguished leadership positions in the public and private sectors. She is a member of the Directors & Boards editorial advisory board.