Quietly last year Democratic Gov. Jerry Brown signed California Senate Bill 826 requiring publicly held companies based in California to have a minimum of one woman on their boards of directors by the end of 2019. From there, women’s representation will increase. By the end of July 2021, companies must have at least two women on boards of five members and at least three women on boards with six or more.
According to the Los Angeles Times, this means over 600 women will be needed just for the boards of the largest publicly traded companies in California, not to mention smaller companies. If this is expanded across the nation, this would translate to over 3,000 women needed by 2021 to balance the board rooms across the country in the Russell 3000 companies.
While many forward-thinking companies recognize the glaring need for gender parity in the board room, California companies should actively attract this talent as other companies across the country are sure to follow suit.
Finding, attracting and hiring your next talented board member, who also happens to be a woman, should be part of your company strategy. This should not be a haphazard approach but a planful, proactive process. Below are four steps that will guide any board of director search.
- Align your board
As with many senior level searches, multiple stakeholders weighing in on the position, requirements and candidate profile often lead to disparate opinions. Success depends on doing the upfront work to align all the members of a hiring team, in this case your BOD.
To facilitate consensus, ask the following questions prior to engaging with candidates:
- What is the role of this individual?
- What background is needed to successfully accomplish this?
- What qualities have made other board members successful in the past?
- Where do we think we might find this person? What companies or industries are our targets?
This information should drive a candidate profile that is based on the work to be done and background needed, versus a gut-feel that a certain individual would fit. This will also help encourage diversity when subjective assessment is replaced with objective evaluation based on agreed upon criteria.
- Define your value proposition
Don’t overlook defining your value proposition; that is what your company offers a new board member in terms of impactful initiatives as well as financial compensation.
With the certain increase in demand for savvy female board members, companies need to not only assess candidates but provide a compelling story for why join their board. What are the key initiatives, growth opportunities and board dynamics that would be exciting to a new member? Make sure your board is united in their view of this opportunity and value proposition. In this tight employment market, competition for top talent extends to the board level. Come armed with a unique and exciting message that is tailored to engage female board members.
In addition, make sure the key leaders in your organization have a strong social media presence that speaks to their personal brand. Most passive talent will research your board and leadership team prior to deciding if they are interested in having a conversation. How do your senior leaders show up on the internet? Are their LinkedIn profiles bare bones or non-existent? A weak social media presence is a red flag for top talent and can prevent your organization from having a preliminary conversation with highly sought after board candidates.
- Leverage your network
Networking and referrals have always been the best source of quality candidates and that has never been truer than at the board level. Chances are your senior leadership and board members have a strong network of talented individuals. This is the holy grail for board searches. Tap into this pool of talent using your aligned profile (step one) and value proposition (step two).
Don’t accept that your board and executives “can’t think of anyone.” Our experience shows that some prompted discussion around where this person might be, target companies, industries and shared connections can surface a nice slate of potential candidates. “I can’t think of anyone” quickly turns into, “Let me call her and make an introduction.”
- Build a pipeline of talent
For many the reality of hiring female board members has just hit them. Now what? Smart companies have started to build a pipeline of talented women executives for current and future board positions. CEOs and other leaders in California should be engaging and wooing top talent for all of their senior positions, including board members. If you are not actively building a talent pipeline, you are not preparing for the future. As Benjamin Franklin aptly said, “By failing to prepare, you are preparing to fail.”
The statistics are clear on the supply and demand of female board members. That alone should prompt action to address both immediate and long-term talent needs. But the numbers are not the only reason to identify, attract and engage with female board members. A diverse board is the right business strategy and leads to better decision making and ultimately higher profits. What company wouldn’t want that?