Standing out from the crowd

  • Date:01 Oct 2013
  • Type:Company Director Magazine
Tony Featherstone provides some tips on how directors can become stand-out applicants and ace that interview for a board position.


Leadership consultant Avril Henry MAICD seems an obvious candidate to transition from volunteer to paid directorships. She has worked on unpaid boards for a decade, has well-known mentors and runs female leadership programs. Yet even she has found the early transition challenging.

Henry has applied for 10 board roles in the past six months and made it to the final interview round several times. Like many emerging directors, Henry has found securing a paid directorship a time-consuming and occasionally frustrating process.

She says: “It is disappointing when boards advertise for a director, but don’t come back to you when you apply or don’t provide feedback on why you were unsuccessful in the interviews. When you put a lot of time and effort into the interview preparation, you want to know how you could have improved.”

Henry remains upbeat. “You know if you keep doing the hard work, applying for roles, going through the interview process, and are continually learning, the right directorship will emerge.”

Thousands of emerging directors will relate to Henry’s experience. For many, just being considered as a potential candidate is a big step forward. For others, the challenge is getting through what has become an increasingly contested directorship interview process.

It is not unusual for an ASX 200 company to use an executive search firm to compile a list of 20 or more candidates before creating a shortlist.

An interview with the nomination committee members (including the main board’s chairman if he or she sits on the committee) is usually followed by interviews with other directors and meetings with the CEO, company secretary and even the auditor.

No amount of preparation or high-profile referees can compensate for a poor interview.

Those who still claim directorship is an “old boys’ club” overlook that boards of larger commercial and not-for-profit (NFP) enterprises run increasingly rigorous processes to appoint directors.

“Who you know still matters, but a lot less so these days when going for a directorship,” says Egon Zehnder managing partner Neil Waters. “The process to appoint directors is a lot more contested than it used to be. You can’t assume you are meeting the board to have an exploratory discussion about joining it. You must be prepared to be interviewed.”

Waters’ firm helps appoint more than 50 directors each year for mostly larger organisations. He notes that although more boards are using search firms to identify and screen candidates, the director recruitment process is still less sophisticated compared with executive appointments.

“Those used to interviewing for executive appointments sometimes find the board interview process a bit disconcerting,” he says.

“Some directors do not have a lot of experience interviewing people and the fact that they are interviewing to be a peer makes it a little tricky at times. Prospective candidates must be prepared for an interview that might not be as structured as they are used to.”

There are good reasons why the board interview process differs from executive roles. For one thing, the interview is as much about the candidate conducting due diligence and assessing the board’s quality and culture as it is about the board assessing the candidate.

Executive candidates may have had first-hand experience with the company, its people and industry. The director interview, however, is a chance to glean insights that can only be provided in an interview. This makes the discussion part interview and part exploratory to assess alignment between the board and candidate.

Another challenge is the balance between self-promotion and humility. In an executive role, candidates have greater scope to argue their case and compete for the role.

In a directorship interview, candidates must demonstrate their individual skills and aptitude for working in a team – more humility and humanity instead of hubris and hyperbole.

Compounding that is variability in board interview processes and styles. Large listed organisations often use search firms to identify candidates in addition to those suggested by the board.

Smaller listed companies might rely more on director networks and have a less formal interview process. Small NFPs might have little process at all and rely instead on the chairman or other directors to use their networks to find candidates and persuade them to join.

Although there is no one-size-fits-all approach to directorship interviews, candidates can still follow general advice.

Leading company director Elizabeth Proust AO FAICD has interviewed dozens of directors over a long governance
career.

She is a non-executive director of Perpetual and a member of its nominations committee, chairman of Nestle Australia and is a non-executive director of Sinclair Knight Merz (where she serves on its nomination committee) among other board roles.

Perpetual’s board interview process provides useful insights for emerging directors. Having a maximum tenure on the board (three three-year terms), after which directors must retire, means the nominations committee knows in advance when directors are due to retire and need to be replaced.

“Typically, we start the appointment process up to 12 months ahead and think carefully about the board’s skills matrix and which areas we might need to add to the board,” says Proust.

She says Perpetual usually commissions an executive search firm to assist in finding directors, but not always the same one.

“We give it a job description for the director position and suggest some names that should be in the initial screen in addition to those the firm puts together. An initial screen of 20 to 30 candidates is narrowed to a shortlist of three to five,” adds Proust.

Much depends on the strength of a candidate’s CV when choosing the shortlist.

“I helped someone shape a CV recently for a board I have no association with and, like so many, it was initially a long list of executive roles in reverse chronological order,” says Proust.

“My suggestion was to draw on experiences and skills in executive or governance roles that make you stand out and add something to the board. Put yourself in the shoes of the board before writing the CV.”

Proust says the first interview is an opportunity for the board to assess candidates’ due diligence on the organisation, the quality of their questions and their interpersonal skills.

“The initial interview is more like a process of discovery where both parties are learning about each other.”

Follow-up interviews focus more on strategy and perspective. “You try to assess the candidates’ strategic approach, how they think and whether they can bring a diversity of thought to the board. You are also looking at whether they can challenge management and the board on complex issues and stand their ground, while working effectively to build consensus in a team,” says Proust.

Transfield Services chairman-elect Diane Smith-Gander FAICD, describes a board interview as an “exploration of fit”. She says: “The reality is, if you get to the shortlist for a larger organisation’s board, you have already been pre-qualified as somebody who could make a contribution. The interview is more about assessing what type of contribution you can make and whether you genuinely can bring something new to the board, rather than being a sales pitch from the board or yourself.”

After a distinguished career as a McKinsey consultant and group executive of technology and operations at Westpac, Smith-Gander built a board portfolio within five years that includes non-executive directorships of Wesfarmers and grain co-operative CBH Group (which she will soon retire from). She recently retired as deputy chairman of NBN Co after joining as a founding director in 2009.

Smith-Gander says displaying your strategic capacity is key in the interview process. “Boards increasingly want directors who are strong in pattern recognition and can take disparate bits of interesting information and see trends others may miss. They also need directors who can keep up with the sheer velocity of information boards face and the pace of change.”

Smith-Gander describes the skill as “situational governance” and says: “Boards need to know prospective directors have the capacity to adapt to different situations at fast speed. When I interviewed for roles, I emphasised my consulting experience at McKinsey and having to rapidly learn about new industries and trends across many countries, and making decisions when all facts are not apparent.”

Strategic capacity and adaptability are more marketable to boards than general governance skills, she says.

“It is expected you have these skills and that boards collectively have sufficient knowledge of governance processes.”
Smith-Gander says discussions around strategy create a more forward-looking discussion that helps candidates assess if they are a good fit for where the organisation is heading.

“I once stepped away from the interview process because I realised the board already had directors with skills similar to mine. I didn’t believe I could add anything to the board over and above what was already there and would not have been the right fit for it then or in the future. It was the best thing for that board and me.”

Alison Gaines FAICD, global practice leader of board consulting at Gerard Daniels, says interview preparation and nuances in the discussion, such as body language, have a big influence.

“Well-organised directors will often create an influence tree where they identify, say, a dozen companies they would like to govern and ways of becoming known to that board through personal networks. They follow those companies, learn more about their issues and identify when directorships might become vacant.”

Gaines adds: “Prospective directors might call the company secretary to let him or her know they would like an opportunity to discuss the board’s succession planning and register their interest. Or they might try to arrange a coffee with a director as part of a softer approach.”

She says emerging directors should think carefully about their pitch to boards and build a governance business development plan.

“You must be very objective about your skills and make a frank assessment of any areas that need strengthening. Then draw on your competencies and experience, both in your executive career and from other directorships, and tease out what it is you offer to a board and why your package of skills can add something unique.”

Gaines suggests focusing on three or four key skills in a resume and during the interview process.

“Directors often over-reach and try to promote all their skills. Identify a few things where you excel. For example, you might have long experience in the mining sector and be good at strategic information management. The challenge is showing how that combination can bring something different to a board.”

Gaines adds that practising your soft pitch and rehearsing for an interview can help.

“I know some directors who practise interview scenarios with their mentors. They identify a few executive or boardroom experiences they can highlight to get their message across. But it is important the interview is more of a natural conversation than a scripted one.”

Gaines says the best interview style is curiosity. “You should be genuinely interested in questions asked of you and capable of asking genuinely interesting questions in return. See the interview as an opportunity to discuss a very interesting organisation and potential role. When you are really engaged in the discussion, the messages you want to get across to the board usually come through.”

Gaines says gender differences sometimes affect the interview tone.

“In my experience, women tend to be better organised and prepared than men for the interview,” she says.

“But it can take longer for women to loosen up, get engaged in the discussion and talk about themselves. You need to find a way of quickly relaxing into the interview, while acting in a very professional manner. The key is to be yourself. Boards will see through you if you are not authentic in the interview process.”

Henry believes gender differences play a huge role in interview style and success.

She mentors emerging female leaders, advises companies on gender leadership differences and has written extensively on generational leadership differences.

“Women tend to get promoted based on performance, while men are more likely to be promoted or get board roles based on potential,” she says. “I would argue that women need to draw more on their experiences during an interview,” says Henry.

Self-promotion is another challenge. “In my experience, male leaders tend to be more assertive, self-assured and happy to talk about their achievements.

“Women are often more collaborative and inclusive than men and more likely to say, ‘we achieved this or that’ rather than ‘I achieved it’, sometimes to their detriment in an interview. Thankfully, that is improving as young female leaders come through, but it will take generational change.”

Henry says having a well-known supporter in the governance community is important for emerging directors and counts her former Westpac colleague Ann Sherry AO FAICD as a valued mentor.

“You need someone who is willing to introduce you to people and go into bat for you when boards seek recommendations. It helps you get a foot in the door, but ultimately whether you get that role depends on your skills and experience and how you handle the interview process.”

The biggest challenge, Henry says, is not taking rejection personally.

“Women are more likely than men to take the knock-back personally. You think you are not good enough for the role, or that you did something wrong and go over and over it in your mind.

“The reality is, you didn’t have the right skill set for this particular role, or somebody had a slightly more appropriate skill set.”

Henry adds: “Yes, you can get bumps and bruises along the way with interview knock-backs, but it’s exciting to talk to boards about directorships and to work towards the goal of building a long-term governance career.”

How we can help
See Company Directors’ member-only Director Q&As on “Evaluating an organisation before joining” and “How to find a directorship”, available on our website: www.companydirectors.com.au

Company Directors’ Directorship Opportunities is Australia’s leading listing service for all kinds of board and advisory panel vacancies. To find our more, visit the website at: companydirectors.com.au/directorshipopportunities

ACING THAT BOARD INTERVIEW

Tony Featherstone examines what it takes to make a good impression right through the NFP board interview process.

There are two key differences between interviewing for a not-for-profit (NFP) board role and a commercial directorship: mission and process. Deep empathy for the organisation’s mission is critical and the recruitment process for an NFP director might be less structured.

Generalisations about the NFP sector are, of course, dangerous. Large NFPs, such as industry super funds or healthcare organisations, usually have director recruitment processes more akin to large profit-driven organisations. Some even use executive search firms to find prospective directors.

Smaller NFPs may have less formal processes. The chairman could ask a director to join the board and there may be no interview process or written director specification. Understandably, the challenge is finding a director willing to volunteer his or her time and energy.

It all starts with the mission, says Bill d’Apice, a partner of law firm Makinson & d’Apice, principal legal adviser to the Australian Catholic Bishops Conference and many charities, and a current or former chairman of more than a dozen NFP boards.

“It’s very important that potential directors of an NFP understand the organisation’s mission and whether they are aligned with it,” d’Apice says. “Every director has to start somewhere, but you should never join an NFP board simply to boost your CV or gain experience – the sector is too important.”

d’Apice says the interview process is about helping the NFP assess if a director is the right fit for its mission and for the director to gauge if he or she they can add to that mission.

He says: “When interviewing a director, I always try to understand his or her motivation for taking on the role. Generally, you are more impressed by somebody who has empathy for the cause and wants to give back.”

A capacity to make the transition to the NFP sector, particularly for a director with a business background, is another consideration, he says.

“Those who come from business can make a major contribution to NFP boards, but it is an adjustment. I want to know the candidate appreciates that the NFP sector has a different mindset. Yes, an NFP needs to be sustainable and make a surplus at the end of the year, but it is mission, rather than profit, driven. You need directors who can adapt to that governance setting.”

d’Apice says an ability to raise funds should not be an important consideration in interviews. “Unless it’s a pure fund-raising board, I would not be attracted to a prospective director who says he or she can raise lots of money for the NFP. First and foremost, you want to know the director is aligned with the organisation’s mission, is capable of governing it and adding to strategy, and wants to stay for a long period, rather than use the NFP directorship as a stepping stone to something else.”

Richard Green, director of NGO Recruitment, a specialist search firm in the NFP sector, says director recruitment is too often relationship rather than skill-based. “All too often, NFP organisations, particularly smaller ones, ask their colleagues or friends to do them a favour and join the board. The result is boards not having enough experienced governance professionals.”

Green says all NFPs know they must have a well-performing board but “underappreciate what you have to do to create one.”

He adds: “The best thing any NFP can do is put together a very strong board. But there has been, generally, insufficient rigour in the recruitment process and little scrutiny of how directors are appointed. It has not been an area the NFP sector has invested in.”

Only six of the hundreds of executives and specialists NGO Recruitment has placed have been directors. “The sector has to move beyond the traditional approach of boards tapping people they know to join,” says Green. “It needs to step back, think about skills needed on the board, cast a wider net to find the best directors and have a clear interview process and role specification.”

Larger NFPs show what can be achieved, says Green. “We’re starting to see some NFPs paying director fees and investing more in governance. But it will take a very long time for that to filter through to smaller NFPs, for this sector moves slowly and surely, never with a revolution.”

Green says the conditions are right for higher investment in governance. “Lots of directors want to join NFPs and there is lot of government money being invested in the sector, despite the view that larger NFPs are mostly cash poor. There just hasn’t been a tradition of paying directors or adopting the same types of recruitment process that commercial organisations use to ensure the best governance possible.”

Viewing director recruitment as a cost rather than an investment can do long-term damage, says Green. “I’ve seen some search firms help NFPs on a pro bono basis or with heavily discounted fees. Guess what? They don’t put in the effort required because the recruiters invariably focus on their better-paid work. Or they aren’t specialists in the NFP sector, so don’t have strong networks or understand how important cultural fit is.”

Green adds: “I understand charities and non-government organisations looking to save every dollar possible. But it’s a question of what you spend your money on to produce the best return. I’d argue that investing in governance, and thus the director recruitment process, is money well spent for NFPs.”

BECOMING THE TOP APPLICANT

Tony Featherstone provides 30 tips on how you can secure that board seat and ace the interview process.

Getting the board interview

1. Make yourself known: Although director recruitment has moved a long way from the “old boys’ club”, personal networks remain a vital source of interview recommendations. Network with other directors via the Australian Institute of Company Directors’ events and committees, meet executive search firms that handle director recruitment and build and maintain networks with current directors.

2. Develop a thought-leadership position on key issues: Having a considered opinion on governance issues, in public forums or private discussions, often separates emerging directors from the pack. It shows boards that you are well researched, considered, an independent thinker and willing to stand your ground on issues, which are excellent traits for a governance career.

3. Follow board vacancies: Access published directorship opportunities via Company Directors’ website (for subscribing members), follow annual general meetings of organisations you might like to govern (for retirement announcements) and monitor company announcements for listed organisations.

4. Understand the length of the process: The board appointment process is normally measured in months rather than weeks. It is not uncommon for a large listed company to think about replacing a retiring director at least a year before he or she leaves. Prospective directors should signal their interest early.

5. The resume: Keep it short – no more than three pages – and tailor it for each position. Avoid the standard reverse-chronological format showing executive roles. Show how your collective executive and governance experience adds something new to the board. Provide a short summary at the start.

Pre-interview

6. Understand the nuances: There is no one-size-fits-all approach for board interviews. A large listed company might seek a director with strong strategic skills; an emerging company might favour one who can strengthen governance process; a not-for-profit might seek a director with great empathy for the mission. Most of all, be prepared to be interviewed; do not assume it is only a general discussion.

7. Director specification: Ask for a written “job description” of the role. Smaller organisations might not always have a formal or up-to-date specification, but large ones should. If they do not, it could be a warning sign that the board is unclear on who it seeks and has poor process.

8. The mechanics: Be clear on the interview process. When, where and conducted by whom? How many rounds of interviews are typically conducted? Do candidates have access to the CEO, CFO or auditor in later interviews? How long would the process be expected to run?

9. Organisation due diligence: Know as much as possible about the organisation before the interview, but do not rely only on published information it provides. For listed companies, seek analyst research, which is typically more critical, and scan media databases for more timely information. More motivated directors will expand their research to the organisation’s competitors.

10. Industry due diligence: Directors who demonstrate potential to grasp complex industry issues quickly, especially if they are from outside the sector, stand out. Industry research provided by business forecaster IBISWorld and other firms are a useful shortcut to understanding sector issues.

11. Board due diligence: Who is on the board, what are their professional backgrounds and what are the interconnections between directors and other boards? Do not rely only on the annual report for this information. Do a media search of each director to better understand their backgrounds. At a minimum, it could provide a conversation starter if there are shared networks or experiences.

12. Think about who you are replacing: A director’s retirement can be an opportunity to recruit new skills or find a director with similar skills to the person leaving. The director specification should identify skills required, but it still pays to consider the skills the board is losing and may seek to replace.

13. Deal stoppers: Current and potential conflicts of interests and availability issues should be discussed with the search firm before the interview or with the director leading the nomination directly. Tell the board as early as possible if a new conflict arises – for example, because of a corporate transaction – or if your availability has change.

The interview

14. An exploration of fit: Do not view the interview as a vehicle mostly to sell yourself to the board or for it to sell the organisation to you. It is as much about you conducting due diligence as it is about the board assessing your suitability. Carefully consider whether you bring something new to the board or strengthen it in certain areas, and whether it is the right board for you.

15. First impressions: In most respects the board interview is no different to an executive one; being appropriately dressed, on time, well spoken and respectful are mandatory. One difference is the first interview being more of a mutual discussion to explore fit, rather than a sales pitch to get the job then and there or make the next round. Consider how this affects the first interview’s tone.

16. Listen: Some people cannot resist talking only about themselves in interviews. They passively rather than actively listen, waiting for their chance to speak again. Good directors listen carefully to interviewers, “chunk” answers in digestible pieces to refer to and demonstrate they are capable of listening to others in a collegiate board setting.

17. Be positive: The interview is no place to criticise the company or board or to be overtly negative towards other organisations or boards. Consider how comments are couched. For example, “has the company considered X, Y or Z”, rather than “if it was my company, I’d be doing X, Y or Z”.

18. Maintain confidentially: Comment on your general board experiences to demonstrate skills and experience, but do not divulge another boardroom’s inner sanctum by discussing people or personalities. No board wants to hire a director who does not respect confidentiality.

19. Ask probing questions: Boards want directors who bring a diversity of views, are curious and capable of challenging management assumptions and standing their ground. Be prepared to be judged on the quality of your questions, not just the answers you give. But do not dominate the interview with too many questions or be too aggressive.

20. Show a capacity for pattern recognition: Increasingly, listed company boards want directors who are capable of “joining the dots” to spot emerging strategic trends. Demonstrate your skills in understanding complex issues, dealing with the ever-increasing velocity of information and being able to make fast decisions when there may be information gaps.

21. The tone: Knowing how to hard-sell oneself in an interview is never easy. Experts interviewed for this story said some women generally tend to emphasise group achievements rather than individual ones, sometimes to their detriment in interviews. This compares to men who generally are more comfortable taking credit for achievements.

22. Beware board sales pitches: Beware boards that spend most of the interview selling the organisation or the board to you, rather than assessing alignment and fit between it and you. Ensure you are chosen for strategic and governance skills, and not only reputation and resume.

23. A difficult situation: Think of a complex issue you helped solve, either in a management role or on another board. Without breaching any confidences, be prepared to explain the thought-process you used to overcome the problem and the result.

24. Ethics: Interviewers can tell a lot about personal ethics by the way you present yourself in the interview. The challenge is finding a balance of humility and warmth, while being highly professional and not afraid to ask difficult questions. Show you are a person who directors would like to work with.

25.The end: Let the interviewer end the meeting. Don’t push for a conclusion. Be gracious. Don’t push too hard on the next steps in the process and leave on a positive note. Even if you don’t make it to the next round, creating a strong final impression never hurts.

Post-interview

26. Decide whether to proceed: Reflect on the interview, directors and answers provided. Did the experience match your initial expectations? Would it be a good board to join? Are you certain you can add something to the board? Is the timing right? If not, the smart move is to withdraw from the process, save the board’s time, earn respect and potentially position for future board roles. If proceeding, consider the next interview stage and plan your approach.

27. Don’t rush: It could take weeks before the next board interview. Contact the headhunter first for an update on the interview. Don’t call the directors directly to find out how you went in the interview and what’s next. It can look unprofessional and desperate.

28. Feedback: If unsuccessful, ask the headhunter for feedback on your interview performance and why you were not chosen. If the comments are rudimentary (“other candidates have more relevant experience”) consider asking the director who led the interview process. Some directors, with permission from the chairman, are happy to provide advice to unsuccessful shortlist candidates. The challenge is identifying any recurring issues, such as insufficient financial skills, that stop you getting beyond the shortlist, and can be addressed with training. Know that some smaller organisations may not provide any feedback to unsuccessful candidates.

29. Learn
: Good directors use each interview process as a learning experience and always look to improve their CV and interview style. They know interviewing for boards is a long process, that good positions are in demand and that even the most experienced directors have to interview for roles as they retire from boards and join new ones.

30. Stay positive
: Rejection is never easy. Remind yourself that tens of thousands of directors had to start somewhere and many received their fair share of knockbacks. Getting to the shortlist in some organisations is a terrific endorsement and a sign you are on the right path.