Mark Twain was reported to have said: “I knew a man who grabbed a cat by the tail and learned 40% more about cats than the man who didn’t.”
A parallel might be drawn with recruiting Board Directors: The thought of approaching a prominent person for a Board position, and then turning the person down, may seem as perilous.
Frequently, Boards are accused of appointing only friends as Directors. While this may at times be true, at least two factors have, in the past, discouraged Boards from adopting a more rigorous recruiting and screening process:
- First, the work of recruiting outside Directors can be delicate. While many Boards are inclined to broaden the recruiting effort to ensure they attract the best skills for their Board, they are also sensitive about the potential for embarrassment. Few are comfortable with the concept of approaching prospective Directors, conducting interviews, and then rejecting people whose goodwill is important to maintain.
- Second, if friends and colleagues of a Board are able to provide the talents required, why take the time, spend the money and incur the risk of recruiting strangers? In the absence of a compelling reason to do otherwise, why deviate from what works?
As it happens, there are now several compelling reasons for altering the approach to recruiting Directors.
A continuously changing and competitive world has put pressure on Boards of all kinds to acquire the best mix of talent possible. This factor, on top of calls for greater Director independence, has increased the demand for Directorship talent. At the same time, concern about greater Director liability has affected the supply of talent.
The conclusion many Boards have reached is that the risks associated with not becoming more strategic in recruiting Directors are considerable.
Searching widely, however, demands more rigor in the processes of recruiting, screening and selecting. This raises a question: How can a Board be more thorough in recruiting and screening, yet maintain the goodwill of those it rejects? Stated more broadly: How should Boards go about the entire process of recruiting new Directors?