Dear Board Doc: Getting Referred for that Next Board Seat
The MFDF’s Board Doc is an occasional feature of the Daily News Feed that features questions from our readers. The answers and commentary provided in our responses do not constitute legal advice and should not be treated as such. Please consult with your independent counsel on questions of compliance with the securities laws and director fiduciary duties. If you would like the Board Doc to consider your questions, please e-mail BoardDoc@mfdf.org
Q: I currently serve on a small fund board and would like to eventually get onto a larger board. I have entered my resume in several candidate databases and expressed my interest with various recruiters. However, I am aware that the most successful method to secure a board seat is through word-of-mouth referral. Can you suggest ways that I can get into the ecosystem of getting referred for another board seat?
A: Boards have a range of tools available when seeking to fill an open seat. Many boards begin the process by creating a skills matrix to evaluate their board’s needs and direct a search. From there, boards may use recruiters, candidate databases, as well as personal networks of their members to find potential candidates. You are correct that word-of-mouth referral is one effective way to be considered for a board seat. The use of personal networks has benefited boards in several ways. For instance, the due diligence process can be less taxing and the recruiting costs lower. However, using only these informal networks has excluded well-qualified candidates in the past. And it might be that more boards are expanding their search methods as a result. For your purposes, a comprehensive approach that involves intentionally developing and fostering relationships along with using recruiters and candidate databases could be helpful. Well-connected directors who get referred for board seats have tended to be people who are visible in the industry, committed to networking, and showing professional and personal interest in the people they meet. The reality is that word-of-mouth referrals can carry certain risks for the directors doing the referring, since making a recommendation could potentially place that director’s reputation on the line. Attending industry events that allow for networking, such as the MFDF’s Director Discussion Series, or joining topical working groups or affinity groups, can provide you with consistent opportunities to observe and interact with a wide cross section of directors. In addition, depending on your board’s policies or those of your management company, you may publish articles in your area of expertise or serve as a panelist to increase your exposure to the fund director community. Overall, diligent networking is the key and is the most likely method of giving you regular access to board members who will feel familiar enough to recommend you for a board seat.