Interestingly, while most of us tend to think of the board seat trajectory as one belonging only to those who have already achieved major success in their fields or to CEOS who flock to boards late in their careers so to have a roost (and some power) in retirement, that is not to be totally true.
While board members tend to be on the older side —the average age of a board member in a for-profit is 63 years old—a recent 2023 article in The Harvard Business Review by Harry Kraemer pointed out that while hardly a trend, the times are changing. It won’t surprise you that Kraemer attributes the change to the corporations’ understanding that they need to broaden their perspective by bringing in people of a different generation to help adapt to a changing and evolving business environment. What exactly does a board of directors do? And what’s the difference between nonprofits and for-profits?
The name of the game is governance, and it’s supposed to be the body of people that keeps the leadership on track. This is true of a both a nonprofit and a for-profit entity. That said, the differences between the boards in these two worlds becomes immediately clear.
The nonprofit as well as its employees and volunteers are all unified by the mission, and their job is to clarify, communicate, and involve a larger audience in that mission; there are no monetary perks other than knowing you are on the side of “right” whether that is the goal of maintaining a community garden or organizing a gala fundraiser. Board members tend to be chosen not just for the specific skillset they bring to the table—a background in fundraising or communication, for example—but for their personalities and, most important, their commitment to the cause at hand.
In a for-profit board it’s about mission but the mission is about making money, protecting the investment of shareholders, making sure that the executives of the company are the best they can be. They are not just doing their jobs today but laying the groundwork for the company’s continued thriving; for profit corporations are required to have a board if they are publicly traded and the number of board members is relatively small (nine on average). Board members are compensated and chosen for their expertise, their track records in the industries in which they have worked, as well as non-tangible qualities they bring to the board such as reputation and connections.
There are, of course, big league nonprofits which may seem to blur the line between the nonprofit and for-profit; to become a board member, large and continuing donations to the nonprofit are part of the price of admission, along with other qualities which are similar to those of the for-profit board. One good example is the Metropolitan Museum of Art in New York, where the typical board member contributes millions, but smaller entities—symphonies and the like—in smaller cities may operate in the same way.
The answer is “yes,” though it may take some time and effort, as Harry Kraemer points out. At smaller nonprofits, you’re likely to find yourself serving alongside of CEOS and executives of smaller companies and establishing relationships with those people will permit to broaden your reach if sitting on a for-profit board is one of your goals. Kraemer advises that you find your “niche” and lean into it. By niche he means finding out “what types of organizations align most with your values, passions, and career goals. You may be drawn to nonprofits with compelling missions or larger businesses with global operations. You may find that you fit best in certain company cultures—that could be well-established firms or trendy startups developing disruptive technologies.”
Research by Anthony Hesketh, Jo Smallwood-Taylor, and Sharon Mullen and published in the Harvard Business Review in 2020 provided a more in-depth view of the qualities needed to be a board member of a for profit; the researchers interviewed 50board members of the world’s leading companies. They discovered five types of “intelligence” that make a great board member:
Perhaps, most important, is finding the niche that suits your goals and answers the question of why you want to be part of a board of directors to begin with.