Making the case for GCs on boards & how they can earn a seat
Why are many General Counsel (GCs) being overlooked for board of director roles, even though they have the depth of experience needed by their companies?
Only 10 of the 413 new board members hired by S&P 500 companies in 2020 had a legal background, according to Spencer Stuart Board Index. Yet, 30 or 40 years ago, it was common to have a general counsel or at least one person with a legal background on a company board.
So, what has changed? And why are GCs being overlooked for board roles, even though many are company secretaries to their company’s boards of directors and have the most experience and exposure to the boards? Moreover, what can GCs do to better their chances of joining a board?
I spoke with GCs and experts from major executive search firms to better understand this trend and how GCs, the hidden talents in the boardroom, can elevate their visibility.
<b>GCs face branding issues</b>
General counsels often get overlooked for board seats because of misperceptions that GCs are not growth leaders, according to Breen Sullivan, co-founder of The Fourth Floor, which seeks to drive systemic change by advocating for women’s access to board seats and investments. On the contrary, GCs actually bring layered business expertise from their experience into the boardroom, Sullivan says. A GC will build out a company’s legal functions based on changing market needs and in response to the company’s growth strategy, similar to any other business function.
“The legal function is an operation — just like finance and just like marketing — within the organization that is really important to driving the business forward,” she says.
Because of this misperception, boards do not expand their searches to include GCs and often do not prioritize their skillsets. When it comes to recruiting new candidates at the board level, many boards’ nominating and governance committees often utilize a matrix with desired skillsets for their director succession planning work. These matrices typically place a high priority on broad-scale profit and loss experience, CEO experience, and financial experience. Legal backgrounds are rarely one of the top two or three priorities in these matrices, says Keith Meyers, Global Practice Leader of the CEO & Board Practice at Allegis Partners. As a result, many GCs are excluded from board searches right from the start when nominating and governance committees focus solely on their highest priority skills and experience gaps.
Clearly, there is a branding issue with GCs in businesses, and we need to change that perspective of the GC role, says Sarah Feingold, co-founder of The Fourth Floor. “The value proposition for a GC as a strategic growth adviser and a business executive is that the person tackles a business problem but through a legal lens,” Feingold explains. The GC will drive scale and growth at the business just like any other business executive but with the legal degree as an additional superpower.
To solve the branding problem, GCs and lawyers with boardroom aspirations need to reframe their experience as business partners who have impacted big decisions over time around M&A investment, capital allocation, and talent growth, notes Melba Hughes, Partner and National In-House Diversity Practice Leader at Major, Lindsey, & Africa, a legal search firm. In addition, GCs need to demonstrate in-depth understanding of how the company makes money by highlighting how their decision-making role impacts the business, its strategy and company’s financials.
<b>Efforts to build the GC pipeline</b>
The good news is that there is collective action to increase the visibility of GC candidates for board consideration:
- Sullivan and Feingold (along with Katrin de Haen) founded The Fourth Floor to help women executives (including GCs) gain board-level and advisory board experience at early-stage companies and enable them to build out their board of director resumé and gain board seats.
- Major, Lindsay & Africa has partnered with its sister search firm, Allegis Partners, which specializes in executive and board searches to increase the number of GC candidates.
In addition, the pandemic has started to solve the branding problem of GCs as a strategic business partner, observes Feingold. The pandemic has shed light on the power and the importance of having a well-managed legal function because GCs played an instrumental role in managing risk and navigating the changing laws and regulatory landscape for their organizations during the pandemic. “Having a strong legal function is like having a strong immune system for the body,” Sullivan describes. “It is the white blood cell — if you have a strong immune system, you can run faster and stay healthier.”
<b>4 actions for aspiring board members</b>
While there are active efforts to build diversity in board pipelines, GCs that hope to join a company board can take some key actions now to build out their resumé and increase visibility:
Serve on early-stage company advisory boards — Advising start-up companies is an excellent first step in acquiring board-level expertise. “Many early-stage companies will use their advisors as a bench of possible independent directors they can pull from when they get to the point where they need a governing board or an independent director seats,” Sullivan explains. In addition, being an adviser for early-stage companies on the side is a great way for you to really promote your own brand among large public companies and can be a differentiator for promotion to the next level or C-suite within large companies.
Build your “board” network and amplify your brand and expertise — Approximately two-thirds of board opportunities are filled through networking. GCs should proactively build your “board network” (beyond just their professional network on LinkedIn) and amplify their brand and expertise. This can help GCs be efficient in targeting contacts who are influencers in the board recruiting pipeline. Writing, speaking, and doing public service are the also good ways to gain visibility among existing board members and key actors in board recruitment.
Sign up for a board boot camp — Enrolling in a boot camp for board recruitment, such as the one run by The Fourth Floors, can help GCs “take a close look at themselves and recharacterize their skill set in a way that’s translatable and clear to an early-stage company as a valuable growth adviser to that company,” notes Sullivan.
Hustle hard and be prepared to hear “No” a lot — Waiting around for a board recruiting connection for a large company to contact you for a board role will not make you successful, says Feingold. “You are going to need to hustle yourself and build resilience to hearing ‘No’ multiple times,” she adds. Be proactive and intentional about building and staying connected with your board network.
Despite the recent trend, there has never been a better time for GCs to become board members, according to Hughes. With increasing focus on diversity on boards and the ever-changing regulatory landscape, Hughes says she is optimistic that more companies will recognize and seek talented GCs (particularly diverse GCs) to bring onto their boards.