Do These 5 Things to Gain a Commercial Board Appointment

Securing a position on a commercial board can offer a new level of professional development and opportunities, significantly advancing your leadership career. Some are drawn to the additional income, whilst some aspire to the elite status associated with leadership roles at this level of management. Regardless of your motivations, this article shares five key strategies to help you secure a commercial board appointment.

What is a commercial board? And why is being appointed to one so highly sought after?

A commercial organisation is essentially an entity (body or partnership) that is set up to sell goods or services at a profit. They are more commonly known as a company, which can differ in classification or type based on ownership, liability and business structure. These factors also affect whether the organisation must or chooses to have a governing board and how many of those board members are independent or non-executive directors (NEDs).

Not all commercial organisations have boards, so when it comes to looking for a commercial NED appointment, your primary focus should be on:

• • Public Limited Company (Plc) – These organisations can offer shares for sale to the public (via the stock exchange) to raise money, and the ownership of the company is distributed among the shareholders. It is a requirement that a board of directors manages the company, ensuring compliance with legal and financial regulations, and making decisions in the company’s and its shareholders’ best interests.

    The UK Corporate Governance Code mandates that at least half the board, excluding the Chairperson, should be non-executive directors. The code also suggests that open advertising and/or an external search consultancy should be adopted for the appointment of new non-executive directors.

  • Private Limited Company (Ltd) – These companies have a limited number of shareholders, and their shares are not publicly traded. There is no requirement for these companies to have a board of directors, let alone non-executive directors sitting on their boards. However, as more organisations and private investors recognise the benefits of good governance, they are taking steps to protect their investments by ensuring the company has a board. One that is appropriately sized and comprises both executive and non-executive directors.
    
    
  • Community Interest Companies (CIC) – These organisations are a special type of limited company designed to benefit the community or a social purpose. A CIC can generate profits, but it is required to reinvest a significant portion back into the community or cause it represents. Many CICs recognise that they need good directors in order to provide the best results for their community. As such, they will usually remunerate their directors, including non-executive directors.

A commercial board appointment is appealing to many for various reasons. They

• • are remunerated,
  • offer opportunities to further an executive career,
  • provide exposure to new challenges, sectors and innovative business models,
  • provide new personal and professional networking opportunities,
  • enable ongoing professional engagement after retirement.

How many commercial board appointments are there in the UK?

There are around 6 million private sector businesses in the UK, of which 1.4 million have employees and around 45,000 are deemed to be medium or large enough to warrant having a board. These companies can broadly be categorised into seven types of commercial organisations, including Large Listed Public Companies, Small Listed Companies, Large Unlisted Public Companies, Large Private Companies, and Family Companies. Of course, when you include start-up or scale-up companies, the number could be significantly higher.

A recent UK study found that across all sectors, 82% of organisations with boards recruited a new board member in the last 12 months. Even working with a more conservative figure of 50%, means that potentially there are as many as 22,500 new commercial board appointments each year.

Gaining a commercial board appointment

Knowing the value of a commercial board appointment means little unless you know how to gain one. Here are my 5 commandments to help you do that.

Commandment #1: Thou shalt tell people they are looking for a commercial board appointment

Over 80% of all board appointments are never advertised or go through any formal board appointment process. More specifically, over 65% of people are appointed to a board through a personal contact, and approximately 50% of all board appointments occur through someone you meet rarely or infrequently. So, the first and most valuable thing you can do to get a commercial board appointment is to start telling people you are looking for one. It can be that easy!

Commandment #2: Thou shalt be specific

Once you follow the first commandment, you need to be ready for the subsequent question, ‘What company do you want to be appointed to the board of?’. Being specific about your aspirations is critically important and has several benefits. Firstly, and most importantly, it answers the question that people want to know: ‘What sort of board role do you want?’

This is important because too many people know that their skills and experience are valuable and transferable to commercial boards. Whilst this is most likely true, it does not necessarily mean that they will be appointed, as it is not clear to others. In fact, not being specific about one’s board aspirations, including the names of organisations you are targeting, is the number one mistake people make. They come across as generic, poorly thought through, opportunistic and a reputational risk to others. None of these are qualities associated with successful NEDs!

Commandment #3: Thou shalt manage your aspirations

Being specific is essential, but you also need to ensure that the names of the organisations you articulate as targets make sense. If you tell people you want to be the Chair of Coca-Cola but have never worked in the FMCG industry before or have had significant CEO or Board experience, then you clearly have next to no chance of getting that commercial board appointment. This will damage your reputation and your chances of being appointed via connections.

It is essential that the organisations you WANT to be appointed to are ones that you CAN be appointed to. If your aspiration is to join the board of a listed company in the top 100, but you have no board experience, then you will likely find the road ahead a frustrating one. You must balance your board aspirations against the reality of your appointment to those commercial boards. Doing so will make your journey more enjoyable and quicker.

Commandment #4: Thou Shalt know thy value

You have to be ready to answer the second question you are likely to be asked ‘Why do you want to be appointed to the board of XXX company?’ To answer this, you must know and be able to articulate what your value is and why it is valuable at the board level. This is different to your value and experience as an executive. You need to be able to address the 5 things that a Chair wants to find in a successful director.

Commandment #5: Thou shalt engage and be passionate

Regardless of what your targets for a commercial board appointment might be, you must be passionate about the organisation and what it stands for. I don’t mean being giddy with excitement; rather, you must be able to demonstrate you are passionate about one (or all) of three things:

1. What the organisation does

2. What the organisation is, and

3. How your skills and experience will contribute.

Not sharing these will give a negative and opportunistic impression of your potential appointment. Some may already have this passion, for others, it may need to be manufactured. There are plenty of other ways to develop and demonstrate this passion if you put your mind to it – our Board Appointment Series shows you how.

In Summary

Despite thousands of commercial board appointments being made annually in the UK, there will always be far more people seeking roles than there are opportunities. As such, it is important that you can separate yourself from your competitors. So, regardless of the sort of commercial board appointment you are interested in targeting, you must do just that – target it. That means being deliberate in sharing your aspirations with others. You can not be everything to everyone, so be explicitly clear about the value you bring to those organisations at the board level. Finally, remember to engage with the organisations you are targeting – this can make a massive difference to a Chair and your potential appointment.

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