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Non-Executive Directors: obtaining your first role.

In the Life Sciences arena, I frequently speak to executives within the sector who are about to exit their roles (or have already exited) within a pharma, biotech or medtech company and have a desire to build a non-Executive Director (NED) portfolio. The biggest challenge is how to obtain their first NED role, as boards invariably look to appoint someone with previous experience.

Looking at operating company executives (rather than financiers or lawyers), I have attempted to look at the key attributes or experience that boards look for when appointing a new NED. Obviously they will (or should) be looking for someone to fill a skills or experience gap in the board, but it is usual for a new board appointee to have a number of the following skills or experience:-

 

Previous Board Experience

  • Ideally on a main board as CEO or CFO
  • Experience on a subsidiary board
  • Part of the Executive management board

 

Leading (or being a major player in) one or more value creating events

  • Fund raising via an IPO
  • Trade Sale
  • Significant private funding via VC, PE or corporate investment

 

M & A Activity

  • Successful acquisition of a company or part of a company
  • Building a business through multiple acquisitions
  • Product acquisitions or licenses

 

Commercial Activity

  • Launching new products (ideally for a start-up)
  • Opening new international markets (e.g. China, Japan, Eastern Europe, etc)
  • US market expertise
  • Track record of sales growth

 

Networks and Expertise

  • Technical or academic expert in the company’s field
  • Major opinion leader in the company’s field
  • Extensive commercial network
  • Specific functional expertise (e.g Regulatory submissions, clinical expert etc.)

 

Personal Attributes

  • Gravitas and credibility
  • Communication skills

Assuming that the potential NED has a number of these skills and the requisite experience, then I would recommend three things to help them get that first non-Executive board position, and they are Network, Network and Network. I say this because board appointments do not always get filled via an Executive Search company; frequently existing networks within the boards or, indeed, the investors are used. It is important that that aspiring NED make sure that key stakeholders understand what they could offer to a board and equally as important, that they are available and have capacity. I would advise people to make themselves known to the following groups of people,

  • The high quality headhunters, such as Horton International (and others!) who are used by companies to search for board members
  • Relevant Venture Capital firms
  • Relevant Private Equity investors
  • Your network of Chairmen/women and CEOs
  • Technology Transfer organisations

Sometimes, organisations look for people who are prepared to sit on the board of a private company for “sweat equity”. That is, to carry out various duties for no remuneration, but for an equity position. This usually occurs with early stage companies who are yet to secure an investment from an institutional investor. These can be attractive if you pick the right company; the risk being that you can put in very many hours of work, and the company ultimately fails to raise finance.

A number of aspiring non-Executive Directors have decided to undergo specific training, or to gain a qualification that will both give them a better knowledge of board practice and make them more attractive in the marketplace. One such course is the IoD Chartered Director qualification http://www.iod.com/developing/chartered-director-qualifications/chartered-director.

In conclusion, I would stress that to become a successful NED you must have the experience, knowledge and expertise that can add value to a board and be able to bring a set of skills that is not currently present on a particular board. Secondly, it is important to raise your profile amongst the key decision makers. So if you are looking for your first NED role, or looking to grow your portfolio, please feel free to make contact with me, and good luck in your quest.