5 tips on how to join a board of directors

November 11, 2022 6:29 PM

"Board refreshment is not as rapid as any of us would like to see." Jane Sadowsky (L), senior advisor at Moelis and Company, shares tips on how to join boards at the Most Powerful Women in Banking conference. Beside her: Maria Morris (C), board member at Wells Fargo and S&P Global, and Martina Cheung (R), president of S&P Global Ratings.

When Jane Sadowsky began her career in finance in the 1980s, women on boards were a rare oddity. "It wasn't discussed. It wasn't done," she said.

Things have changed since then, as her own career shows. Sadowsky, who worked as an investment banker at Citi and Evercore before becoming a senior advisor for diversity and inclusion at investment bank Moelis & Company, is also serving on the boards of two metal mining companies and a private equity-owned company.

But it's still not easy, as "board refreshment is not as rapid as any of us would like to see" this year, she said.

Sadowsky shared tips in a panel last month for women to land the highly sought board seats that Wall Street had closed off to them in the past. Sadowsky was joined by Maria Morris, who retired from her insurance executive career at Metlife and is now a board member at Wells Fargo and S&P Global Ratings. Martina Cheung, president of S&P Global, moderated the conversation at American Banker's Most Powerful Women in Banking conference in New York.

Cheung began the session by reviewing a poll of attendees at the conference, which showed that 45% of bankers surveyed said they were currently on a board. Yet when asked if they were planning to join a board, 83% said yes, suggesting a gap for women in finance between wanting to join a board and being able to.

"We don't have a supply problem," Sadowsky said, looking around the room and noting that it had around 200 eligible women leaders. Instead, it's a matter of limited openings, she said.

Jennifer Reynolds, Women Corporate Directors

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Citing research that she said would come out at the end of the year, Sadowsky said in 2022 there were only around 400 board seats "refreshed" or made available out of around 5,000 seats among the S&P 500 companies.

"Approximately half of those go to outside search, and half of those go into the network that board members and their social networks already have. So we're looking at 200 seats in any given year for the S&P 500," Sadowsky said.

IPOs and SPAC activity, which would otherwise have created board seats, also dried up this year. And in the landscape of ongoing mergers and acquisitions, each of those deals also shrink the number of board seats by half, Sadowsky said.

In the meantime, for a woman banker or financial services professional who wants to join a board, below are five tips the panelists shared on how they did it, and what they learned from being on boards.

To view this year's list of the Most Powerful Women in Banking, click here. For the most Powerful Women in Finance, click here. For our list of the Most Powerful Women to Watch, click here.

Have a category in mind

Given the shortage of board positions, Sadowsky said, women should have a sense of the type of board they want but also be a bit open in terms of industry, and prepared to demonstrate relevant skills if it's in an adjacent sector.

"It's important to frame what kind of board you want to be on," she said, adding that many companies with boards existed beyond the typical S&P 500 ones that usually come to mind. These can include private equity boards, family company boards, and nonprofit boards.

"Really understand what it is that you're looking for, and why," Sadowsky said. In her own case, she knew she wanted to be on the board of a public company with $1 - $10 billion in market capitalization, and in her field of experience or an adjacent field.

"So I spent 25 years as an electricity banker. Mining is not electricity, but it is a commodity, it does use a lot," she said.

"So as you're framing your story about unpacking what it is that you do, and creating those adjacencies … give yourself the widest possible permutations of where you could serve as a valued member of a board, given the supply and demand dynamics."

Network for recency

For women aged 50 and up, the panelists noted, it's especially important to have direction and planning if you want your career to continue progressing. This includes preparing to apply for those prestigious board seats.

To that end, networking is crucial, Sadowsky said, especially in the form of attending corporate live events and presentations.

"We all have a recency bias. So if you're asked to recommend a board member, you're going to recommend the woman you spoke to at breakfast, rather than the one you spoke to four months ago. So be there, be present."

Morris recalled taking time after conferences to follow up with people she had just met, which turned into calls that helped broaden her search for board opportunities. She had decided to put herself out there more, after getting a colleague's feedback that she was well-respected by MetLife clients but was not visible for her work in the broader corporate world.

Morris added that it helped in her case to have the backing of higher-ups like the then-CEO at MetLife, while she was still an executive there, to introduce her to places where she could land. A woman board member at MetLife also took her out to lunch and encouraged her along. "When I was retiring, I was already well on my way to interviewing for other roles and then Wells Fargo" came along, she said.

Hone your boardroom resume

The panelists agreed that a resume for joining a board of directors, and the skills involved, differs from the resume expected of someone applying for an executive job.

The focus is "much more on capabilities and competencies and really fitting in, in a synchronous way to what the board is trying to accomplish with the company," Morris said.

If you worked in an adjacent industry, as she did with insurance, you can demonstrate your ability to transfer those skills to your target company.

Sadowsky said looking back she could have "taken some detours in a career that was pretty much soup to nuts investment banking" and broadened her corporate skill set with stints in operations or being chief of staff, to understand how a business functions on all sides. She encouraged women to seize opportunities for learning a company's P&L.

A working knowledge of a different industry, though nowhere near expertise, can be quickly picked up through attending webinars, reading newsletters and taking certification courses cheaply available online, Sadowsky said. She encouraged professionals living in major cities to get on the mailing lists and invite lists for local financial services groups that could help them stay abreast of developments and regulatory issues in different industries.

"Try to pay attention to what's state of the art, what's happening in the Delaware Chancery court."

Look for a fit when interviewing

If you're already at the interview stage, consider yourself as conducting the interview as much as being interviewed, Morris said.

"I thought I was selling myself. And actually, if you were already getting an interview for a board, you already made it," Morris said. "So really, it's more stepping back and having a two way dialogue to say, are my capabilities the right capabilities for this firm?"

Morris said she would begin her background research of the company by reading "all of the public materials I could find, every time a CEO spoke, anytime the board chair spoke, so I could get a better understanding of the culture of the company."

In particular, the CEO is an important person to assess for fit and interest in engaging "both for governance and for strategy," Morris said, because of their influence on the board where they often also sit as the chair. She added that meeting as many board members as possible is important to help assess fit — only getting to speak with those in the Nominating and Governance committees is probably not sufficient to inform a decision.

With hard economic times likely to come soon, she said, it's important to look for collaborative relationships where board members can build trust with each other.

Sadowsky said she asks about "smaller" details to gauge culture too, questions around onboarding, communication and board rules.

She also asks if there was assigned seating in meetings — which can convey how flexible the board is. "Could they take different perspectives, by literally sitting in different parts of the room?"

Limit commitments

The number of hours an average board member used to require was 150 a decade ago, when Sadowsky joined her first boards, but now pundits put it at 250 hours, she said. "And they are behind the times," she said, citing a rise in government regulation, pandemic supply chain issues and labor turnover.

"So if you're the one person that consistently can't make the board calls and needs to be scheduled around, that's just not a great place to be," Sadowsky said.

For this reason, it's important not to overcommit when it comes to board seat offers.

On a basic level, make sure the quarterly earnings reports at companies you're considering don't fall on the same dates, Sadowsky said.

Finally, be upfront about what your commitment levels are. Being the chair, in particular, is a big responsibility, Morris said. As a chair herself of an audit committee, risk committee and regulatory oversight committee, she spends more time in meetings than most board members.

"You have to have the time to prep, to be in the moment and ask the credible challenge questions," Morris said. "You need to really think about whether you know the industry well enough."