How do you become a board member at a public company?

[Saluki]

I don't like to mention my day job, but I work in government and it pays well, but I'm dissatisfied with it. I'd really like to be on the board of a public company or two one day. Possibly when I retire. 

 

I noticed a job posting on LinkedIn recently at a large financial institution where a couple of my former co-workers are now.  One of them is Head of [Something regulatory] and he mentioned they were looking for a Director of  [Something Regulatory].  The position would report to him. The company is over $100bln market cap. 

 

The pay is good, but the top of the salary range is less than 20% more than I make now. And this company has done layoffs before, but in government, my job is very secure and I have great co-workers.  Other than my old co-worker, I don't know anyone there or how the workplace is. I enjoy travelling and have plenty of vacation time due to my length of service, but that would obviously be less in the private sector.  So if you factor fewer paid  vacation/sick days in, the pay isn't more.

 

The title sounds impressive, but I am not ego driven, so that wouldn't be the motivating factor for me.  It just seems to me that having that title at an international financial institution might make it more likely to transition to being on a board vs a bureaucrat. 

 

My question is:  if you are on the board of a public company, or know someone who is, how did that happen for you? 

 

If you were in my shoes, would you consider this move (about the same pay, they have laid off people in the past, probably much more work because they have been in trouble recently, but with a title that might open doors).  

[StevieV]

1 hour ago, Saluki said:

If you were in my shoes, would you consider this move (about the same pay, they have laid off people in the past, probably much more work because they have been in trouble recently, but with a title that might open doors).  

 

Not enough information and it always depends on the particular individual, company and position, but the potential move does not strike me as enticing at all.

[Longnose]

According to Gemini 

 

How to Become a Board Member at a Public Company
Becoming a board member at a public company is a highly competitive process, requiring a combination of experience, expertise, and networking. Here's a general overview of the steps involved:

1. Build a Strong Professional Profile
Gain Extensive Experience: Most board members have significant experience in senior management roles or as entrepreneurs.
Develop Specific Expertise: Identify areas of expertise that are valuable to public companies (e.g., finance, technology, legal, healthcare).
Build a Strong Network: Cultivate relationships with industry leaders, executives, and other potential board members.
2. Understand Board Responsibilities
Learn Board Governance: Understand the role of a board member, including fiduciary duties, oversight responsibilities, and risk management.
Stay Updated on Corporate Governance Best Practices: Familiarize yourself with the latest trends and regulations in corporate governance.
3. Identify Target Companies
Research Companies: Identify public companies that align with your expertise and interests.

Analyze Board Composition: Understand the current board members' backgrounds and identify potential gaps in skills or experience.
4. Network and Build Relationships
Attend Industry Conferences: Network with executives and other potential board members.
Leverage Professional Associations: Participate in industry-related organizations to expand your network.
Maintain Strong Relationships: Nurture existing relationships with executives and board members.   
5. Position Yourself as a Candidate
Develop a Board Bio: Create a professional document highlighting your qualifications and experience.
Showcase Your Expertise: Publicize your knowledge and insights through articles, speaking engagements, or thought leadership.
Consider Board Director Training: Attend board director training programs to enhance your skills.   
6. Seek Out Opportunities
Direct Approach: Reach out to companies directly to express your interest in serving on their board.
Leverage Recruiters: Utilize executive search firms specializing in board placements.   
Attend Board Director Conferences: These events often connect potential directors with companies seeking board members.
7. The Nomination and Election Process
Nomination: If selected, you will be nominated for a board position by the company's board of directors or through a shareholder proposal.
Shareholder Approval: Shareholders typically vote to elect board members at the annual shareholder meeting.   
Important Considerations:

Time Commitment: Board membership requires significant time and dedication.
Legal and Regulatory Compliance: Understand the legal and regulatory obligations of board members.
Fiduciary Duties: Board members have a legal duty to act in the best interests of shareholders.   
Remember: Becoming a board member is a competitive process that often takes years of preparation and networking. Patience, persistence, and a strong professional profile are essential for success.

[EBITDAg]

Pretty difficult to do if you aren't C-level at another public company. Maybe if you were head of regulation/compliance at JPM type bank you could sit on a small bank public co board. 

 

I'm not sure if this Director position is a typical Corporate direction position - if so, it's likely at least a decade of work and some luck to get to Sr Director, then VP, then SVP/EVP/head of dept.

[fareastwarriors]

2 hours ago, Saluki said:

One of them is Head of [Something regulatory] and he mentioned they were looking for a Director of  [Something Regulatory].  The position would report to him. The company is over $100bln market cap. 

 

What you're saying sounds like a job? Not really on the Board of Directors?

[Saluki]

6 minutes ago, fareastwarriors said:

 

What you're saying sounds like a job? Not really on the Board of Directors?

 

Yes.  But I would think that position would make me more attractive as a board candidate, for another company, down the road than the road than my current position. 

[Gregmal]

Honestly if you have a semi decent professional resume, and the cash, take a meaningful position in a small cap company, attend the AGMs, network with the shareholder base, and then go from there. Bigger companies you have to be in bed with the folks already there, get on your knees for the CEO/chairman, etc...to bureaucratic IMO

[Gamecock-YT]

Financial Institution titles are always self-inflated. Kids 3-4 years out of college will have VP titles, so I wouldn't take 'Director of Sand Pounding' as anything serious. Rule of thumb is how many hierarchies you are below the CEO that determines how powerful/important the position is. Also having previously worked in a regulatory role at a financial institution, I don't think that career path is heading to your board of director promise land. 

 

I've worked with quite a few people that were directors for companies we had various equity stakes in: usually it was either we were a founding shareholder, brought scale and influence to a platform, or came in during a series B-D fundraise and got a board seat (or an observer seat) as part of the funding agreement.

 

So I'd say your best bet is something similar to what Greg is suggesting. Get in with 1 company and take it from there, CEOs talk when it comes to needing new directors. So be a good boy and you might find yourself on a couple. 

 

[brobro777]

Dude maybe you should copy Charlie Munger and quit the lawyer business 

 

 

[lnofeisone]

On 8/13/2024 at 11:46 AM, Saluki said:

I don't like to mention my day job, but I work in government and it pays well, but I'm dissatisfied with it. I'd really like to be on the board of a public company or two one day. Possibly when I retire. 

 

I noticed a job posting on LinkedIn recently at a large financial institution where a couple of my former co-workers are now.  One of them is Head of [Something regulatory] and he mentioned they were looking for a Director of  [Something Regulatory].  The position would report to him. The company is over $100bln market cap. 

 

The pay is good, but the top of the salary range is less than 20% more than I make now. And this company has done layoffs before, but in government, my job is very secure and I have great co-workers.  Other than my old co-worker, I don't know anyone there or how the workplace is. I enjoy travelling and have plenty of vacation time due to my length of service, but that would obviously be less in the private sector.  So if you factor fewer paid  vacation/sick days in, the pay isn't more.

 

The title sounds impressive, but I am not ego driven, so that wouldn't be the motivating factor for me.  It just seems to me that having that title at an international financial institution might make it more likely to transition to being on a board vs a bureaucrat. 

 

My question is:  if you are on the board of a public company, or know someone who is, how did that happen for you? 

 

If you were in my shoes, would you consider this move (about the same pay, they have laid off people in the past, probably much more work because they have been in trouble recently, but with a title that might open doors).  

20% isn't sufficient for a jump IMO. My wife is a US Fed. Her package of benefits after 10 years of service is amazing. Gets even better after 20 years. It includes health insurance at the Federal rate for her and her spouse (even if we get a divorce, but I can't remarry until 55...wild rules). Pension. TSP with a reasonably good match. Job security. 

 

I've seen people get on the boards through insane networking and volunteering at organizations OR if they already knew someone and had a status (e.g., C-suite). Being in compliance is hard way to get to a board seat. Maybe Wells Fargo would need someone with that perspective. 

[Munger_Disciple]

I agree with @Gregmal. You are not an independent board member if you need the money from the board seats. You will just become an a$$ kisser of CEOs who put you there. I really don't like "professional" board members who go on as many boards as they can because it is a lot money for little work; they just need good a$$ kissing (a.k.a. "networking") skills and promise to not "rock the boat". It is a shitty way to go about life.  

I would urge @Saluki to become an owner of a business and then go on its board without compensation but as a very large interested shareholder. I believe Bruce Berkowitz is doing this at St. Joe. Following the Berkshire model is the way to go.  

Edited August 16 by Munger_Disciple