5 common mistakes can derail your search for the best board members (these mistakes are easy to commit, that’s why they’re common)
Follow best practices and you won’t get burned (trust but verify, conduct background checks, probe decision-making skills, use rubrics, etc.)
Need more help? Try resources like “A Practical Guide to Board Member Searches” or “45-Second Checklist for Board Member Searches”
Competition among PE firms for great board members continues to increase. That’s why it’s important not to commit these common mistakes in your search:
- Excited about a “big fish.” Board member searches often take place under deadline or deal pressures. Discovering a “dream” candidate early in the process can lead you to short circuit best practices. In the heat of the moment, you may be tempted to forego evaluating other candidates or bypass critical assessments or background checks. The result can be a quick decision that you’ll spend a long time regretting.
- Answers you can’t verify. A prime example of this mistake is taking at face value the numbers a candidate gives you for revenue, sales growth, market share, turnover, etc. throughout their career. If you can’t verify those figures via independent sources, industry reports, or senior executives at the same company, you may wind up lamenting your credulity.
- Apples to oranges. It’s not uncommon for multiple people at the PE firm and portfolio company to interview a number of board candidates over a fairly extended period of time. But subjective judgements change. Memories fade. Use a rubric with “must-have” capabilities, expertise, talents, relationships, etc. clearly spelled out, plus some form of quantitative scoring system. It’s a must for avoiding primacy and recency effects, let alone sharp differences of opinion about basic qualifications.
- Failure to probe their decision-making. There are two aspects to this mistake. First, not asking specific, focused questions about past decisions and how they were arrived at. For example: “Tell me about a time you had to bring a tough topic to board. How did you prepare? What did you say in your presentation to the board? What was your follow up process?” Second, not posing “what if” questions to understand their decision-making process when faced with new, unfamiliar challenges. For example: “How would you go about announcing the need to cut staff? How would you go about deciding who to layoff? What would be your process for communicating cuts to the company? What pitfalls might arise?”
- Ignoring red flags. The fifth mistake in this list relates to the first. For example, if a candidate seems to be pushing you to rush your decision, it’s definitely time to take a step back. That type of warning sign should trigger an immediate need to dig a little deeper. One powerful technique is to reach beyond their list of references and talk confidentially with people who know the candidate — co-workers, supervisors, direct reports, partners, etc. – and ask one simple question: “Would you enthusiastically recommend ‘Candidate X’ for a board member position?” You’ll find their answers quite revealing.
One final parting thought: according to Pitchbook, 1,064 funds raised a record $888 billion in private capital last year. That kind of record-breaking activity can only exacerbate the competition for great board members.
The good news? There is a way to improve your odds. Get started early and be proactive. One useful resource is our white paper: “A Practical Guide to Board Member Searches”. Or, if you’re pressed for time, the “45-Second Checklist for Board Member Searches” provides a quick reference to help improve board search outcomes.
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