Here are some areas where women can focus to prepare themselves to sit on company boards.
By Deborah A. Farrington (Founder & General Partner, StarVest Partners)
Participating at the board level of our portfolio companies is one of the most interesting and enjoyable roles I have as a venture capitalist.
A significant portion of building value at a portfolio company happens within the board of directors. As a part of this group, you advise and guide strategy, tactics and outcomes for the company.
In my opinion, there are two key jobs for a venture capitalist: The first is picking great investments, and the second is being influential in the board room as you actively guide the direction of companies. While the first job is important to start the company-building process, the second is where company value is created.
Earning a seat at the table of the board of directors is important for anyone who wants to be a part of guiding a company toward its future, not just for venture capitalists.
It is especially important for women, who are largely underrepresented on corporate boards, to think strategically about how they can add value to companies on a broader scale.
In 2010, only 15.7% of Fortune 500 company board seats were held by women, according to research by Catalyst.
With women holding 51.5% of the management and professional positions in the U.S. labor force, there is an increasing pipeline of qualified women to fill these seats. But many women may not be cultivating the skills they need to obtain board positions.
Based on my own experience and through working with other successful women, I have identified some areas where women can focus to prepare themselves to sit on boards:
- Develop a career plan - It is crucial to manage your career and be in positions where you can demonstrate your leadership skills. Starting with a strong educational background, such as a degree in economics or engineering followed by an MBA, is a great foundation for building a career in technology and/or venture capital. Don’t be afraid to take a risk. Get out of your comfort zone, perhaps by joining a smaller organization where you can showcase your skills. Be mindful of what professional positions you take on and make sure that each position adds value to your personal skill set.
- Get relevant experience - The most effective company boards include a diverse set of people with a diverse set of skills. It includes experts from each relevant sector or position teaming up to provide advice for the companies. Finance and technology backgrounds are especially pertinent for venture capitalists. Actively focus on areas of learning that prepare you to analyze business models. Operating experience that can translate to the board room is highly sought after. Companies want advice from people who have strong track records of success and practical experience, not just people who can theorize.
- Specialize - When our portfolio companies want to add board members, we look at candidates who have the experience that we need to make that specific company successful. This could be in sales or e-commerce, for example, or operating experience in a particular sector, like mobile. For public companies, we may need a corporate governance expert who is or has been a general counsel, or an audit committee member who is a current or former CFO. Be a master of your position, gaining the experience and knowledge that will cause boards to look your way.
- Be a leader - The most effective board members are effective leaders. Don’t be afraid to be assertive and exercise your ability to lead in various positions. Take a leadership role in industry-related activities, such as networking groups, or join a non-profit board and start actively learning how to effect change and influence an organization. Use these experiences to cultivate your leadership skills and practice wielding influence at the board level.
Earning a seat on the board of directors is just the start. To be effective on the board and help lead the company to success, you need to use your voice and get your opinions out there. Drive the discussion and make sure your concerns and thoughts are addressed. Don’t wait for other people to call on you and ask what you think. When other people perceive you as a leader, they will respect your opinions and want you to be part of their boards too.
Always take a broad view. As a board member, you have a responsibility as a fiduciary, as well as to the constituency you are representing. You often need to balance competing objectives to achieve the right decision for the company.
Lastly, try to employ a win/win strategy. With every issue that is discussed, aim to focus on the important things. If something is important to another participant, but not critical to arriving at what you think is the right outcome, consider giving ground to build a relationship with the other participants.
It is both a privilege and responsibility to serve on a board. Come to each meeting prepared, and don’t shrink from expressing a well thought out opinion. Your expertise, leadership and advice may be just the force a company needs to take it to the next level of success.
Editor's note: Got a question for our guest blogger? Leave a message in the comments below. About the guest blogger: Deborah Farrington is a Founder and General Partner of StarVest Partners, L.P., a New York City based venture capital firm investing in technology-enabled business services companies with a focus on software-as-a-service, ecommerce and internet marketing. She sits on the Boards of NetSuite where she is lead director and chairman of the Compensation Committee, Fieldglass, Host Analytics, Insurance.com, Perquest and PivotLink on behalf of StarVest. Deborah was named to the Forbes Midas 100 List of top VCs in the United States in 2008 and 2009.