One of the pleasures of working closely with board members is that we have all been through numerous market cycles together. We’ve seen the frenzies and the lulls that come about as markets gyrate. So, for anyone who has noticed that the last two years in board search have been especially quiet, here’s your heads-up that this is about to change. And the implications will play out differently depending on how well prepared you are.
Riding the Board Recruitment Wave
To understand these dynamics, let’s take a look at where we are in the board recruitment cycle.
The Wave Comes In
In 2019, board opportunities were in abundance. The most well-known candidates’ phones were ringing off the hook, and they weren’t always answering. And when they did, they were often referring recruiters to someone else. The initial wish-list candidates were, as the phrase goes, “boarded up.” This dynamic catalyzed boards to rethink those lists and their priorities. Nominating & Governance Committees had to do a little more soul searching around securing the “must-have” qualities versus those that were “nice-to-have”. The good news is that looking at board recruitment through a different lens opened doors to many people who might have been overlooked in the old order. For three years, board composition underwent significant change – in the diversity of boards, in the appreciation for industry crossover, and in discovering new ways to think about who serves.
The Wave Goes Out
And then, in the middle of 2022, boards all but stopped searching. What made the board recruitment wave go flat? For starters, we experienced a definite-maybe-recession, which some say hit softly and in select sectors and others say still lurks in the shadows. Add exogenous factors such global geopolitical instability, US workforce disruptions (strikes, layoffs and redefining back-to-work), technology-induced anxiety, and an unpredictable Fed, and many directors concluded that stable board composition was a good idea. Most boards had plenty of other issues demanding their attention: adding new directors into the mix – especially if the board recently made changes in composition – was something that could wait.
The Tide is Turning
This change in the market dynamic, going from fast and furious to slow and cautious, has had some residual impact that makes for another interesting shift in market dynamics.
- Some impressive board-ready talent, including many of those wish-list candidates who were previously unavailable, are getting fewer calls. They are more likely to be receptive to new outreach and board opportunities.
- Boards have had nearly 24 months of constancy, using the time to be thoughtful and deliberate in considering the skills and expertise they’ll need to future-proof their boards.
As a result, we expect that the board market will heat up again in the next 6-12 months. It won’t be as frothy as it was in 2019, but it will present some great opportunities to get qualified candidates into spots that boards have created with intention.
What Does This Shift Mean for You?
To capitalize on this board search environment, we suggest the following next steps.
Boards: Get ahead of the pack
If you’re on a board and thinking about adding to it, consider starting now to get out ahead of others. It may seem slightly contrarian to move now, but it will serve you well to have more selection and less competition. Even if you are not in a rush to fill a seat, seizing the opportunity to just put your nose in the market will pay off. Recruitment processes are best served by building relationships, and there’s no time like the present to do that.
Candidates: Brush up on high demand knowledge
If you’re a candidate, keep your profile up-to-date and, more importantly, keep your expertise current. It’s a great time to brush up on your knowledge around Cybersecurity, AI, ESG, and other topics that are in demand and will perennially be on a board’s agenda. You needn’t be expert in all areas although fluency will matter.
Boards: Use this opportunity to succession plan
For a board that won’t be adding a new director in the next year, take advantage of what you’ve observed about your business and the changes to your strategic plan to fire up your Succession Planning process. Avoid scrambling when a future opening exists, whether it’s planned or unplanned. If you don’t have a rigorous Succession Planning process in place yet, you’re not alone – most companies don’t, either. That can be remedied. To learn more, reach out to me or stay tuned for my next post.
Abby Adlerman is the founder and CEO of Boardspan
Photo by Jeremy Bishop on Unsplash