5 Thoughts on Recruiting Board Members for Public Companies

Recruiting board members for public companies is more difficult since the passage of Sarbanes-Oxley. Board members face more work and more liability. Here are 5 ideas that can make your board search more successful:

1. Build Consensus Among Current Board Members
In the past, a CEO often recruited board members on his or her own, but today the nominating committee and the rest of board will want to be involved. Before you start, get agreement on the candidate specification and desired committee assignments. Define who will lead the search, and what role other board members will play.

2. Don’t Get Star Struck
Many companies start a board search looking for a high-profile active CEO. In the real world they are not easy to attract because they are busy running their own companies, and it has only gotten harder since Sarbanes-Oxley. So pursue them, but understand the odds are against you. And if you get one, be aware that their primary responsibility is to their own company, and they may not always have as much time as you require.

3. Consider Retired Executives
They offer a wealth of experience, great contacts, often have served on other boards, and usually have more time to devote to your business.

4. Consider Division General Managers
Division GMs do not have the star power of CEOs, but they often have much of the same experience. Many are eager to serve because they view board experience as an important part of their professional development.

5. Review Board Compensation and Liability Insurance
No one serves on a board for the money, but compensation for board members has risen in recent years in recognition of the increased workload and liabilities. Make sure your board compensation is in line with comparable companies. Further, directors and officers insurance must be adequate and in line with your industry. Prospective board members are keenly aware of their personal liability.