Finding the right fit for your board can be a long, difficult process. The Boardroom Report asks three of Australia’s top executive search firms what boards should consider before commencing the recruitment process.
Future focus: short-term and long-term strategy
“What is the primary mandate of a board?” begins Tom Mutch, Partner at Derwent Executive. “After scrutinising the financial health of the organisation and monitoring and engaging with executive management, it is about driving strategy from the top.”
A strong understanding of the short and long-term strategic priorities is the foundation on which you can begin to build a profile of your ideal candidate.
But don’t just think of this as your next boardroom hire.
“To avoid granularity and appointing just one director, boards should start to think about what they want their boards to look like in the years to come. First and foremost, it should be a succession planning exercise. Boards should be hiring for the future and not just for today,” explains Kevin Jurd MAICD who leads Spencer Stuart’s Board Practice in Australasia.
Hold a mirror up to your board
The early stages of the recruitment process should involve considered self-reflection. Boards and committees should review their skills matrix against the organisation’s strategic intent. Evaluate your board’s strengths and achievements, and address the gaps that need to be filled for the future.
Korn Ferry, Spencer Stuart and Derwent Executive all note that diversity and a strong understanding of technology are two key areas in which an increasing number of their clients are looking to improve their capabilities.
“By assessing and agreeing on what it is your board needs, you can then start to piece together what it is, or in fact, who it is you are looking for,” says Robert Webster MAICD, Head of Board Services at Korn Ferry.
Create a ‘wish list’ of attributes and capabilities
Compiling a list of the key skills and capabilities - “the non-negotiables”- as well as the specific organisational requirements is a useful exercise.
Non-negotiables: the skills, judgement, background and connections to fulfil the duties of director.
- demonstrable success in business
- deep and relevant experience
- strong financial literacy
- understanding of how they will contribute to the organisation
- director duties and responsibilities
Additional requirements: qualities and attributes that are most likely to add value to the dynamics of the board and the organisation
- Specific sector knowledge and interest
- Strong understanding of the regulatory environment
- Diverse experience across sectors
- High-level functional knowledge
“Developing a clear position description for the role at the very beginning will reduce the likelihood of disagreement on the final candidate. It pays dividends to think about what it is you want as well as what you need,” says Webster.
Quantify and qualify the subjective
While a good cultural fit for your board may be difficult to define at the outset, executive search firms and nominations committees use a range of methods to test the subjective attributes of their candidates. These include:
- Criteria – Spencer Stuart has developed a set of five Board IntrinsicsTM : intellectual approach, independent-mindedness, integrity, interpersonal skills and the inclination to engage (motivation). Candidates who score well in all areas are most likely to be capable of contributing as “all-round” directors. This is assessed in addition to their specific skills set, knowledge and experience.
- Questioning – Avoid asking questions that are bound to get you one-dimensional responses. Pose questions that require complex answers; where candidates must give an example of a situation and an explanation of a process, a decision and an outcome. Aligning your questions with selection criteria is one way to figure out whether they are hitting the mark.
- Feedback – A 360 degree approach to feedback is recommended and should be done using both formal and informal channels. Where formal feedback may be seeking endorsements from the references provided by the candidate, informal feedback relies on the connections of the board and the wider organisation. Feedback from a cross-section of people, i.e. former managers, peers and junior reports will give a clear picture of what the candidate has achieved and how they achieved it.
Standardise your recruitment process
“When you standardise the recruitment process, you level the playing field and you reduce the risk of picking the wrong candidate,” explains Tom Mutch.
Using a ‘blended approach’ of assessing the subjective, attitudinal and behavioural attributes alongside more readily quantifiable core skills and capabilities of candidates doesn’t mean that process should go out the window.
It may seem simple enough, but nominations committees must ensure that when they compare candidates, they compare similar attributes. This starts with asking the same questions of candidates and aligning questions with a consistent set of selection criteria.
“A failure to do so can leave you with a shortlist of candidates who have experienced very different interviews and who have been assessed against very different criteria,” Mutch says.
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