Lately, a lot of people have been asking me about how I transitioned from being a CEO to being a director on multiple boards. It could be because I chair an executive search and leadership advisory firm’s board or because I have a generally flexible schedule. Or it could be because I’m involved in things that are important to me and am visibly happy with my life right now.
To be clear, I was very happy in my career at Shell and my last gig as Aera Energy CEO, one of California’s largest oil companies. It was a private company, and I had an amazing eight-year run that survived the economic shocks of the 2008 financial crisis and the rigid California regulatory environment, and never had one day of red ink.
That said, I knew when it was time to step down and move on. I was not “pushed.” That brings me to both how I decided to do board work after stepping down, and what I did to turn this into a successful next professional phase of my life. I have some steps that I would like to share about my path to board work.
My disclaimer: It may not be for you.
Step 1: Determine whether board service is right for you.
It takes a certain disposition to do board work. Before joining a public or private board, do your homework on the remit of boards and directors. If you don’t spend much time with your present company’s board, this is particularly critical. Corporate Board Member and the National Association of Corporate Directors (NACD) are great sources of information regarding the role of boards and the challenges they face.
The role of the board has four elements: 1) governance (compliance with laws and regulations); 2) risk (keeping the company out of the ditch); 3) strategy (oversight) and 4) CEO succession/executive compensation. When you make the decision to go the board route, you must be comfortable with the fact that you represent the shareholders and do not run the company. You will be a trusted advisor that is involved in major strategic decisions and capital allocation—but you will not be called upon for the day to day. Your mission will be to show up prepared and ask questions so that the management team has properly considered the options. Of course, the way to test your appetite for boards are nonprofits, foundations, etc. However, it is different to sit on a board that pays you, rather than one that you have to make major donations to.
Step 2: Consider your path BEFORE you exit.
About two years into my tenure as CEO, I decided that I wanted to do board/portfolio work after my “retirement.” I was still in my early 50s and had served on internal company JV boards around the world. I really enjoyed governance and coaching work, and thought it would be fun to do when I stopped working full time. With the decision made, I activated my network to assist me in both understanding the public company board landscape and building relationships that might lead to board work.
Two years later, I landed my first public board position at Tyson Foods, which came through relationships and a search firm. The Aera Energy board only allowed me to sit on one outside board, so I settled in to learn the public company board space and offer my skills and knowledge to Tyson.
STEP 3: Determine your non-negotiables for board or full time work.
In the time between my decision to step down and departure from Aera Energy, I considered taking on another full-time gig. Although I was on the path toward establishing a portfolio of boards, I also realized that, by stepping down at age 57, I could take another full-time operating role—if I wanted to. (My wife made it clear that kicking up my feet and playing golf was not an option!) With that in mind, I developed a clear set of criteria that I use to evaluate every opportunity.
To this day, I use those same criteria when any opportunity presents itself. Post Aera, I’ve considered several full-time opportunities including one of my dream jobs…but none of these fit my criteria (or were more attractive than the board portfolio I have built.) Sticking to these predefined criteria makes it easy to entertain opportunities without feeling pressured to do anything that does not align with my personal plan. For most, the hard part isn’t creating the criteria—it’s sticking to it. However, it is absolutely critical to not “settle” for something; if you do, you risk not being at peace.
The other critical piece is your financial condition. A friend once told me that joining a board is “not about net income; it’s about net worth.” Board compensation is not negotiable and is comprised of a cash retainer and stock that you generally do not sell until you leave the board. Do not join a board as a replacement for your income stream.
STEP 4: Decide on the contents of your board portfolio.
By now, you might be wondering how a former oil and gas CEO got on the board of a company like Russell Reynolds. Well, board roles are as much about skills and capabilities as they are about your sector experience. At Russell Reynolds, the board needs to be aware of global markets, strategy and leadership development. Like all directors who don’t have specific domain knowledge of a board they sit on, I have invested a lot of time understanding the sector, business model and strategy. From there, I was prepared to be an effective director and the rest is history. For the record, of the six “for profit” boards that I have sat on, only one was from my specific domain expertise of upstream oil and gas.
Russell Reynolds was not on my “boards to consider wish list.” Yet when the opportunity came along, I thought about both the skills I could bring, as well as my emotional connection to the organization’s goals. I believe the world needs strong leaders so, to borrow from the Russell Reynolds mission statement, I have a real passion for “improving the way the world is led.” In considering any board, I believe it is essential to have a personal emotional connection to the mission. An emotional connection provides the energy to devote discretionary time to the business and leads to saying “we” when speaking about interactions with the company, team members and customers. Board work is not a job—it’s service.
Lastly, all boards have directors with domain expertise. If you are working full-time, forget about staying in your sector because of conflicts. If you are “retired,” you can work in your sector once you are past any non-compete clauses.
Step 5: Be patient and realistic
As you begin your journey, a list of dream boards is helpful. That said, you must both be realistic about whether you are a fit for that board and that they would select you. Wanting to be on a particular board is not enough—you may not have the skill set the board needs to guide the next phase of the company or to replace an outgoing director. It’s important to be patient about securing the position and to stay open to companies and sectors you are less familiar with. Finally, most people who sit on boards will tell you that relationships factor very heavily into selection. This is because the critical success factors of boards is chemistry and culture. Boards meet periodically and tackle difficult subjects, so a climate of inclusion and mutual respect is paramount. Relationships are essential in this dynamic.
If you’re considering a portfolio/board career, the steps above can help you plan your move into another phase of your professional life. It’s certainly not for everyone—but I can tell you that it’s fun out here!