Five Steps to Making the Search for a New Director More Effective

It’s true: directors have shelf lives. This means new director searches should be well planned—and boards need a contingency plan for good governance because surprise resignations can happen.

As governance chair of ABARTA Coca-Cola Beverages, a third- and fourth-generation family business, I recently replaced myself (and one other director) after several term renewals and 13 years. It was an extremely well-planned and deliberate replacement process—and it worked so well that we added three board members instead of the originally planned two because we found such great candidates.

Here are five steps that can help to make a new director search process efficient, effective, and exciting.

Step One: Spec Development

After a planned director resignation or term expiration, the strategic plan should be the foundation for the entire range of the nominating and governance committee’s work to ensure a productive, effective search. What director experiences will help the management team over the next three to five years? For example, if the strategic plan includes significant mergers and acquisitions, then it’s critical for the new director to have this experience. Our nominating and governance committee worked for six-plus months to draft a thorough spec that included the company mission and vision, board roles and responsibilities, industry and functional experience, and personal values. Then, we shared the spec with the entire board, including family advisors. This was the most time-consuming—and most important—part of our successful process.

Step Two: Recruiter Evaluation

The committee decided to conduct a board search using a recruiter to find an excellent, diverse pool of candidates. Our definition of diversity included the usual items, such as gender and race, but we also added age because we felt a younger board member would be able to coach the next generation of family directors. A search firm provides a much broader pool of candidates than director, executive, and family networks. Like the candidate spec, we evaluated search firms based on their experience with critical aspects of our strategic plan: for example, experience with placing directors who had been involved in family business board searches and familiarity with candidates who had experienced generational transitions as either CEOs or board members.

Step Three: Candidate Sourcing and Review

One reason to hire a recruiter is to help sort and evaluate candidates and save time for the nominating and governance committee. A good recruiter and team thoroughly research and interview candidates prior to presenting a wide range of people who meet board requirements. While we always want 100 percent of our spec, we all know there is no perfect candidate. The recruiter must also understand the board’s culture as well as what may be viewed as unusual requirements. For example, an East Coast board may not want to manage the logistics of having West Coast board members, particularly if additional travel days are necessary based on meeting locations. By the same token, a candidate may not want to deal with extra travel.

Step Four: Interviewing

Some feel phone interviews are “Boomer leftovers,” but I disagree. Phone interviews allow you to totally focus on a candidate’s words, not their virtual background or clothes or hair. Based on our recent experience, phone interviews are an essential first step toward the ultimate goal of in-person interviews. Two to three current board members should do phone interviews with the preliminary list of candidates.

That said, Zoom interviews are great for adding efficiency and speed to the director recruiting process. However, a few guidelines can add to the effectiveness of video interviews

• Be cognizant of how many interviews of any type a candidate must experience. Remember, you are also “recruiting” these candidates.

• Candidates should have ample time to ask questions. One option is to begin with candidate questions and then move on to interviewer questions. At least half of the time should be dedicated to candidate questions.

• Zoom interviews should be no longer than an hour.

• No more than four interviews should be conducted via Zoom; otherwise, the conversation can become one-sided.

Step Five: In-Person Interview

Finally, there’s the in-person interview (assuming it is feasible with COVID-19). You should now have several great candidates who have been vetted by the recruiter (including references), the nominating and governance committee members should be unanimous in their feelings about them, and the other board directors should have given them a thumbs-up. The objectives of the in-person meetings—which should involve a meal or two—include getting a sense of a candidate’s chemistry with board members and getting to know them as people. These interviews should also allow for a deep understanding of how the candidate can help management achieve the strategic plan and how they will interact with the C-suite and vice versa. In family or private businesses, it can be incredibly useful to get the viewpoint of shareholders’ spouses as well.

In sum, following these five steps can make a search for a new director easier and more effective. Having the right people on a private company board can help steer the corporation toward achieving its goals and larger vision. It may seem daunting to replace a director on the board but employing achievable steps can help make all the difference.