Is a not-for-profit board appointment the place to begin?

If you are considering your first board appointment, I am sure many people will have told you that “a Not-for-profit (NFP) board appointment is the best place to begin”. This is often good advice; however, in some cases, it is the opposite of what board role you should pursue.?

In my previous article, I discussed the many significant benefits of a Not-for-profit board appointment . Whilst these are all excellent reasons, personally and professionally, to consider a NFP board role, starting your board career with this sort of role may not be the right option for you … or lead to the kind of board portfolio you anticipated.??

In this article, I will explain why a Not-for-profit, charity or for-purpose board or committee appointment may or may not be the right role for you.

First, review your Board Aspirations

Deciding where you begin your board career starts with understanding your board aspirations . That means being really clear on your medium and longer-term board aspirations. To do so, ask yourself the following questions:

• What board do you want to sit on in 5 or 10 years??
• Do you aspire to develop a fully financially self-supporting board portfolio??
• Do you want to compliment your executive career with a board appointment?
• Are you financially stable and want to give back via a board role??
• Are you passionate about serving the for-purpose sector?

Understanding what your long and medium-term aspirations are is fundamentally important. Once you have, you can work backward from them to determine what board opportunities today are achievable and desirable and will help you achieve your longer-term goals.

For example, if your long-term aspirations are to sit on the board of a significant commercial company, a listed entity or develop a financially self-supporting board portfolio, then you should consider your first or next board appointment carefully.?

Let me explain why.

Does a NFP appointment lead to a commercial board appointment?

The answer is no and yes.?

No: On one hand, a recruiter once told me, ‘the first sort of board you are appointed to can be the last sort of board you are appointed to’. So, if you desire a listed board role, beginning your board career on a Not-for-profit board may not help you achieve that goal. Essentially, this sort of appointment may peg you as only a NFP Board Director. Further, it could suggest to the market that this is where you believe your skills are most valuable. That it is where you want to contribute your time or that it is the level your experience suggests you should be. So then, if this is not the case and you harbour ‘higher’ board ambitions, you need to think carefully about what your first or next board appointment looks like.

Yes: In the past, I have spoken about the 5 things a Chair is looking for in a successful non-executive director (NED) candidate. The first thing they look at when considering NED candidates is whether they have board or governance experience. Whilst a NFP board appointment may not match or even facilitate your longer-term aspirations, if you have not held a NED before, a NFP board appointment will allow you to market yourself as a non-executive director. As such, gaining this type of appointment will make you a more competitive candidate by simply being able to start conversations, interviews, applications or your NED CV with ‘I am a Non-Executive Director…’

Yes: Not all NFPs are the same. Some are incredibly commercial. They run large operations with million dollar turnovers and have incredibly influential NEDs sitting on their boards and committees. The leverageability of this sort of appointment is obvious. The catch is that these roles are often filled by highly experienced NEDs, so getting appointed can be difficult. It is a catch-22.??

What have successful Non-Executive Directors done?

In my 20+ years of helping people gain board roles, speaking with thousands and thousands of NEDs and recruiting NEDs for organisations across the commercial, NFP and government sectors, I have noticed that many experienced and commercially successful NEDs have a significant number of NFP board roles in their background. Many even started their board careers with for-purpose roles. This is where it gets confusing and, on the face of it, contradicts my previous statements. I’ll try to explain.?

In these cases, the reason for their initial (and often paid) commercial board appointment was not based on their early NFP NED experience. Instead, it was based on their commercial and executive experience. They may have been CEO or Executive Directors in the past or had a very specific set of skills, expertise or reputation that could be used by the appointing organisation.?

That brings us back to your board aspirations. It is important to properly and thoroughly assess and reconcile your suitability and appointability to your desired organisation. That means balancing your board aspirations against the reality of your appointment. Put yourself in the shoes of the Chair of the organisation you want to be appointed to, ask yourself whether you would seriously consider appointing you. If you are not sure, I think that might be a ‘no’. That’s okay; there are other more suitable roles out there, and you may have saved yourself a year or more of frustration.?

Should you consider an unpaid board role?

The reality is that unpaid or for-purpose board roles offer significant and tangible benefits that should not be ignored. The benefits, as I see them, include:

1. You gain a Non-Executive Director (NED) title: If not already sitting on a board, an unpaid role will often be your first step. By taking this sort of appointment, you get to call yourself a ‘Non-Executive Director’, a title that you can leverage into other more significant or paid boards, should you want them.
2. Gain governance and strategic experience: Any board appointment improves your governance expertise, whether paid or unpaid. Unpaid board roles are often just as demanding as paid roles and offer great learning opportunities. Further, this experience will serve you well in your executive role, allowing you to work with your board better. It will make convincing others of your strategic success easier – something critical to do when pushing for a promotion.
3. Develop your network: Even small NFP boards often include significant NEDs. Sitting around the table with these people is a terrific way to build your networks , which can be used both personally and professionally.??
4. Join the club: Only 5% of people have board appointments. By gaining one, paid or unpaid, you join this exclusive club. In doing so, you have the legitimacy to both approach and speak with other NEDs – the leaders and influencers in their industry. These networks can lead to new business and new opportunities.
5. Future-proof your career: Paid or unpaid board roles can future-proof your career. Studies have shown that those who hold a NED appointment in addition to an executive role; earn more overall; are more promotable; have greater job security, and are unemployed less. Further, sitting on a board can also help future-proof your career by preparing you for retirement, redundancy or a career change. Board appointments also help you work more effectively and facilitate new connections, which are helpful for business and personal development. More than ever, a board appointment today should be part of your career plan.

Board Direction advertises over 3,500 NFP, government, and commercial board roles annually and has helped thousands of people develop board careers. Our team does all the work for you. We source a wide variety of board and committee opportunities and list them all in one place for our members to access. We?would love to have you on board.

About the Author

David Schwarz is CEO & Founder of Board Direction – Australia’s leading board advertising and non-executive career support firm. He has over a decade of experience of putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world