Welcome to the Club?

Groucho Marx once said, famously, that he u00e2u20acu0153would not join any club that would have someone like me for a member.u00e2u20ac Presumably, Groucho would not have been interested in becoming a corporate director, but just think how he would have livened up the boardroom with his edgy humor and cut-to-the-chase questions. Imagine the wicked fun Groucho would have had with peer reviews! u00e2u20acu0153Now there sits a man with an open mind. You can feel the draft from here.u00e2u20ac

Letu00e2u20acu2122s play this farce out a little further. If Groucho had been invited to join the board of a bank holding company and had asked you for advice, what would you have told him? Mike Kelly, the managing partner for the board services practice at New York-based executive recruiter CTPartners, says that first-timers often arenu00e2u20acu2122t picky enough about the boards they agree to sit on. The boardroom is a club that many successful people are eager to join, and too often they discard the very qualities that made them successful in the first placeu00e2u20ac”intelligence, judgment, discretionu00e2u20ac”because the invitation flatters their vanity.

Recently I asked Kelly and a handful of other people with long experience in the world of corporate governance what they would tell a friend, over drinks, if that friend was asked to join a corporate board and sought their honest advice. How do you determine whether or not to go on a particular board, and how do you make it a good experience once youu00e2u20acu2122re there? Board service doesnu00e2u20acu2122t always turn out the way you expect it to. (Just ask the former directors at Enron, WorldCom, or Disney.) Hereu00e2u20acu2122s their advice boiled down to five main points.

Do your due diligence. u00e2u20acu0153Get to know the people on the board,u00e2u20ac says Kelly. u00e2u20acu0153Get to know the management team. Get to know the outside legal counsel and independent auditor. Get as comfortable as you can with the people.u00e2u20ac Comfortable. Interestingly, all four of my experts used that same word. It requires a certain degree of intuition. How does the situation feel to you? u00e2u20acu0153Do you like these people?u00e2u20ac asks Frank Placenti, a partner with Cleveland, Ohio-based law firm Squire, Sanders & Dempsey, and a director at Lipid Sciences Inc. u00e2u20acu0153Youu00e2u20acu2122re going to spend hours with them in meetings and in airports. If you donu00e2u20acu2122t like the people youu00e2u20acu2122re going to be doing this with, then why do it?u00e2u20ac

Understand the politics. Each company has its own style and itu00e2u20acu2122s important to know that going in. u00e2u20acu0153Figure out what the company culture is and what the board culture is,u00e2u20ac advises Kenneth Daly, president and CEO of the National Association of Corporate Directors. u00e2u20acu0153Do they like questions during board meetings? Do they care if you call management? There are politics on the board, make no mistake about that, and you need to know how you fit in.u00e2u20ac

Know what your unique contribution will be. u00e2u20acu0153Make sure you understand why you were recruited to the board,u00e2u20ac says Daly. u00e2u20acu0153What skill set is the board looking for?u00e2u20ac Are you being brought in to be the marketing, technology, or regulatory guruu00e2u20ac”or are they merely looking for a trophy director? u00e2u20acu0153Donu00e2u20acu2122t let yourself be someone elseu00e2u20acu2122s hood ornament,u00e2u20ac cautions Placenti.

Do you trust the management team? A prospective director can ask around about the companyu00e2u20acu2122s CEO and other senior executives, but unfortunately this question might not be fully answerable until youu00e2u20acu2122ve been on the board for a while. Essentially, you judge the CEO and his or her team by their actions. u00e2u20acu0153How does it feel to be on this board?u00e2u20ac says Placenti. u00e2u20acu0153Do you have the independence you need? Do you feel empowered? No amount of corporate governance process can replace trust. Do you trust the way they do business?u00e2u20ac

Educate yourself about the company. Keith Cobb, who chairs the audit committee at BankAtlantic Bancorp Inc. and BFC Financial Corp., suggests that new directors spend as much time one-on-one with senior operating executives throughout the company as possible. Cobb also likes to mystery shop BankAtlantic branches and those of competitors. u00e2u20acu0153Iu00e2u20acu2122ve made it a point to visit company locations and walk the aisles,u00e2u20ac he says. u00e2u20acu0153Itu00e2u20acu2122s amazing what you can learn.u00e2u20ac

I would add a sixth point to this list: Know when itu00e2u20acu2122s time to resign. u00e2u20acu0153Iu00e2u20acu2122ve left [a few boards] because I felt uncomfortableu00e2u20ac”not with CEO, but with some of the other board members, [with] their style and mode of behavior,u00e2u20ac says Cobb.

Or as Groucho might have put it, u00e2u20acu0153Iu00e2u20acu2122ve had a wonderful time, but this wasnu00e2u20acu2122t it.u00e2u20ac