Board Recruitment Series: Executive Search Firms (Part 2 of 4)
Dear Board Doc: My board needs to conduct a candidate search. Our searches in the past have been accomplished entirely through our personal networks, but one of the members of our nominating committee suggested hiring a search firm. What might be some of advantages of conducting a search this way?
Executive search firms can be useful resources for boards, particularly if the board does not have an existing “short list of candidates” when the board begins the search. Effectively, using a search firm outsources the sourcing and screening stages of the recruiting process. Using a search firm still will require board involvement, from establishing the search criteria for candidates, to narrowing the slate and interviewing candidates.
Search firms work with fund boards to fill vacancies on a fee-based basis. Those fees tend to be roughly equal to one year’s salary for a director, typically between $120,000-$180,000. Search firms have reported that those searches typically take approximately 12-18 months to complete, which is about the same timeline that we hear from boards who manage their own recruitment so working with a firm does not typically speed up the process. However, hiring a firm would reduce board member participation during that timeframe, which may yield a benefit in terms of efficiency and allowing the board to focus on its other responsibilities while the search happens concurrently.
Search firms may be helpful in identifying candidates who both have the experience desired and will fit well within the culture of the board. Paying for those skills, even to evaluate and compare candidates who come via directors’ referrals or other sources, can be worthwhile for a board that does not feel confident they can determine the best match.
Search firms almost certainly have an edge on most board members in terms of their networks. Firms typically position themselves to be connected well within the industries they work in, they work frequently with executives who may later be skilled fund directors, and they are refreshing their pool constantly. As a result, working with a search firm may produce a slate of candidates that is broader in terms of industry, field of specialty, area of expertise, and career experience, as well as demographically in terms of gender, race, region, etc. To the extent that a board wishes to cast the widest possible net, and/or to consider candidates that bring a very different profile to the board than its existing members, tapping into the broader network of a search firm may be of value. In addition, using a search firm does not preclude boards from including candidates from their own networks or other sources into consideration. Those candidates can be added to the firm’s slate and then compared alongside candidates the firm has sourced elsewhere.
The next installment of this series will look at services and organizations that boards could join or purchase to manage the process themselves but expand the reach of their efforts to reach candidates outside their personal networks. Click here to read the previous post.