If you’re nearing retirement, you might be intrigued by the idea of serving on a nonprofit or for-profit board of directors. Board membership offers a high-impact way to leverage your expertise and skills, while working on a flexible basis.
I’ll share some tips for finding board positions in just a moment. But first, let me highlight two very important differences between for-profit and nonprofit board membership:
Board Compensation (or Lack Thereof)
For-Profit Boards If you want to get paid for your time serving on a board, you’ll want to look at for-profit boards. While compensation levels for board service vary tremendously depending upon the size, sector and financial health of the business, payment can be substantial, especially at larger corporations.
According to the 2016 Spencer Stuart Board Index report, the average annual total compensation for S&P 500 directors, excluding the chairman’s compensation, was $280,389.
And even in cases where you won’t receive cash for your for-profit board service, like at a startup, you might be offered stock options or other forms of deferred compensation that could lead to a big payday down the road.
Nonprofit Boards While some nonprofits compensate board members, it’s most definitely not the norm. The vast majority of nonprofit board members serve on a voluntary basis. Furthermore, they are frequently expected, and sometimes required, to make significant annual financial donations to the organization. It’s also not unusual for board members to be asked to help solicit volunteers or raise funds (a combination of expectations sometimes referred to as “give, get, or get off”).
Not all nonprofit boards expect a financial give, but it is something you’ll want to be sure to ask about if you’re considering serving on one.
For-Profit Boards Companies are highly selective in choosing board members and competition for those spots is fierce. You don’t have to be a Fortune 500 CEO to be a candidate (although it helps!), but since for-profit companies have an obligation to deliver a financial return to their shareholders, they need board members with proven expertise starting, running and growing successful businesses.
Furthermore, corporations often seek board members with specific skill-sets, such as financial or legal expertise. Board members must weigh in on critical topics like succession planning, crisis management and acquisitions, so the requirements for these positions are significant.
Nonprofit Boards Landing a nonprofit board position is far less competitive, except at large, high-profile organizations like Save the Children or the American Red Cross. Nonprofits also look for board members with a wide range of skills. But they want people who can contribute expertise in running nonprofit programs, managing community relations and fundraising as well.
Often, the main qualifications to serve on a nonprofit board are simply having a willingness to do so and a sincere commitment to the organization. If you’re a well-connected community member who can serve as an ambassador for the organization, that’s an added bonus.
Tips for Finding a For-Profit Board Role
Clearly, it’s much harder to land a for-profit board seat than a nonprofit one. Assuming you’re up to the task, your strategy for finding a corporate board position should be similar to the strategy you’d use to land any other high-level job. Three tips:
To get a feel for what companies look for, read their annual proxy statement (for publicly traded firms) or research the backgrounds of existing board members using sites like LinkedIn. Another smart way to learn about board membership is to sign up for BoardProspects.com, an online community and recruitment platform for existing and prospective board members.
Prepare a customized board resumé that highlights why you’re a strong candidate for a board role. Bolster your qualifications by participating in trade and professional associations and by serving on the boards of nonprofit and civic organizations.
Let your professional network know of your interest in a board position and ask them for referrals to other high-level executives and board members. For-profit board searches are often conducted by executive search firms, like Spencer Stuart and RSR Partners, so use your connections to get referred in.
Tips for Finding a Nonprofit Board Role
Most people end up in nonprofit board roles as a natural extension of their involvement with an organization they care about or because they’re passionate about a cause.
But serving on a nonprofit board is different from simply being a volunteer. So before you accept a board role, here are three questions to consider (adapted from an article on Bridgespan.org, “Nonprofit Boards: How to Find a Rewarding Position”):
1. Do my goals align with this organization and its board? Knowing who else is on the board can give you a sense of whether you’d be a good fit.
2. Will my skills, experience or expertise help increase the impact of the organization and further its mission? The best board roles are ones that give you the opportunity to be engaged in an impactful and meaningful way.
3. Can I commit the time required to fulfill my legal and fiduciary responsibilities as a board member? It is vital that as a board member, you understand what is expected of board members before you sign on.
If you don’t know of any local nonprofits looking for board members, visit sites like Boardsource.org, Bridgespan.org and Volunteermatch.org, as well as the big sites like LinkedIn.com or Indeed.com to learn about, and search for, some.
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