Board Recruitment Series: General Succession Planning and Building Personal Networks (Part 4 of 4)

Dear Board Doc: Our board has recently added several new directors.  While we won’t have any vacancies in the near future, we realized during our search process that it would benefit the board if we spent more time on general succession planning.  Can you share any tips for us as we begin this process?

Whether your board has an impending vacancy or not, building a network of potential candidates to tap into improves the likelihood of locating the right people when you need them. Many boards opt to leverage their own personal and professional networks as they plan for recruitment, either alongside other strategies or on its own. They may draw on existing contacts, make efforts to connect with people at industry events and meetings, or both. Either alone or combined with other approaches, using the board members’ networks and those of the board’s counsel, accountant, and trusted advisors is cost-effective and has the benefit of allowing a board to evaluate known or semi-known quantities rather than evaluating candidates who are not known well. Relying on existing relationships may reduce the investment of time on locating and getting to know candidates to evaluate fit and qualifications, while building a new network by going out to meet people at events would likely be more time-consuming than searching a database with focused criteria.

An important consideration when using existing personal and professional networks for recruitment is being aware that those networks may be limited in terms of the board’s needs in terms of industry fluency or expertise. Many boards, whether they run the search on their own or not, use skills matrices to visualize the skills and qualifications they want to have represented on the board and then evaluate the existing board and incoming candidates against that matrix. In this way, boards can take a more professional approach to establishing the types of candidates they’d like to see and then measuring a slate of candidates against those criteria. Evaluating candidates from the personal networks of the board members may prove more challenging than one would at first assume because the personality fit may be clearer than the skills match, and the board members will have to determine which of these holds more weight.

To prepare for turnover on your board, start early and to build a network of potential candidates before you need them. This may include people who are not quite ready to retire or join a board but will within the next 3-7 years. You may find them speaking at or attending industry conferences or working with your audit firm. To keep an efficient timeline for your search, define within your boardroom who the decision-makers in recruitment will be, who gets a veto and when, and the timeline of your process, including a deadline for new candidates to be considered (late additions may be added to your longer-term candidate pool to be considered for the next hire). A clearly defined strategy and timeline can keep your process focused and moving along efficiently so that candidates don’t end up leaking out of your pipeline to opportunities that started earlier or moved more quickly. By limiting the decision-makers early in the process (maybe only two or three directors see the full candidate pool from all sources) and winnowing down to a more manageable number to bring to the full board, your process can move along more efficiently while still involving the full board.

As your board determines its approach, it is important to remember that cost may be the most easily quantifiable factor in deciding between the options, but it is not the only one. There is still a cost to the board and shareholders if its members are spending too much time on recruitment, or if a search extends so long that quality candidates become unavailable.

Click here to read last week’s blog post in our Board Recruitment Series covering candidate search tools.