Interested in becoming a corporate board director, but confused about what experience you need to be a strong candidate? Do you want to join a corporate board but not sure how?
If you’ve ever wondered about becoming a corporate board director, this episode is for you.
In This Episode of The Career Rx We’ll Discuss:
- What a corporate board director actually does
- The differences among types of boards and roles within them
- How and why you would become a member of the board
Today, I have a special guest, Jean Rush, and we discuss becoming a director on a corporate board: what it is, why you’d want to do it, and how you’d get to do it. She’s a member of 8 boards and gives us an overview of board membership and what it takes to get a seat at the table.Subscribe for next week’s part 2 where we take a deeper dive into becoming a board director.
By the end of this episode, you’ll have a better understanding of the roles available on nonprofit and public boards, what categories of experience and skills you need to join a board, and how to lay the foundation to get a seat on the board!
“It’s not what you know or even who you know – it’s who knows you, and who thinks about you when opportunities arise” – Marjorie Stiegler
In this Episode:
[1:05] Introducing guest Jean Rush – former healthcare executive
[2:50] Being an attractive and competitive candidate for board service
[4:00] What can you bring to the board if you’re not a C-suite exec? Lots!
[5:50] Decide what you want from the board experience
[7:10] You’re a piece of the bigger puzzle – how to position yourself that way
[8:00] So, what exactly does a corporate board do?
[12:30] “Eyes in and fingers out”
[13:15] Transferable skills for your your first board director role
[14:25] The networking opportunities that come with board memberships
[16:35] It’s a service, but it’s not a volunteer job! Board member compensation
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TRANSCRIPT: Episode 64 – Becoming a Corporate Board Director [Part 1]
Hey there, I’m Marjorie Stiegler and you’re listening to The Career Rx Podcast, where we tackle the important things they don’t teach you in medical school. Like how to treat your career, like the business it really is, with strategies to accelerate the kind of success that you want, because you deserve a career you love, and a career that loves you back. Are you ready? Let’s get into it.
So welcome back everybody to The Career Rx. As you know, in this podcast, one of our main goals is to really talk about how there are just really no limits on the direction that you can take your career and really, so many different ways that you can make an impact as a physician in health care, whether or not that’s directly taking care of patients. And today, I have a real treat to talk to you about a topic that is not really in my wheelhouse. And so I brought a special guest on with me today, we’re going to talk about becoming a director on a corporate board, what it is why you’d want to do it and of course, how you’d get to do it. And so today, I am joined by my special guest, Jean Rush. If you were to look up Jean on LinkedIn, you would see her title is listed just as a “board member”. So I’m going to ask you, Jean, to introduce yourself to the audience, if you would, and welcome to the show. Thank you for being here.
Oh, well, thank you for having me. It’s a pleasure. And by way of background, I spend most of my career in the payer space. So on the insurance side of healthcare, spending 30 years at Cigna Health Care, and then another four at 17. And then my last three years at Highmark Blue Cross Blue Shield. And during those years, I held a variety of different positions, including President of Cigna government services, which was signals Medicare arm at the time, also served as the CEO and plan president for Kentucky Spirit, which was a start up Medicaid plan for centene in the state of Kentucky, and then ultimately ended up running all of Highmark Blue Cross and Blue Shield government markets business. So my focus in the healthcare space is really on the government side, Medicaid, Medicare and the Affordable Care Act. But then in 2018, I decided to start a new chapter in my career, which is actually board service. And so I retired from the payer space. And now I serve exclusively on several health care boards.
That’s fantastic. It’s such an interesting journey, to think about what a remarkable pivot it must be for you just in the day to day to go from what you’ve been doing for decades, to what you’re doing now. And, you know, one of the things that struck me was, so when I first heard you speak, I was listening to a Healthcare Businesswomen Associations webinar earlier this year, so for my audience to know that, and one of the things that you had mentioned that was so appealing to you about board service at that time, was that you could kind of go deep and learn new things in this kind of work. And so that got me very curious, because the idea of going deep to learn new things that you don’t know about today, or you don’t know deeply about today, and yet at the same time being an attractive and competitive candidate for board service, at its face value seems like it’s not compatible, but I think it but of course it is. And part of what you were explaining is how that works. Can you tell us a little bit about maybe what you bring to the board, but also how those two things work together?
Sure, sure. And they both can exist in harmony with each other, even though they seem to be on opposite sides of the spectrum. In terms of what you bring to the board, I think one of the things that each board candidate needs to think about is what are those special skills, talents experiences, from your background that would add value to a particular board. There are lots of different types of boards, publicly traded private equity backed privately owned and nonprofit boards. And they’re all looking for something a little bit different. And so as a candidate, one of the things you need to think about is what can I bring to the board. As I looked back at my career history, there were a few things that I was able to put on my list.
First of all, I had been CEO, so I had PnL experience, that’s helpful, but I would say it’s not necessary for a board. So for those listeners who may not have p&l experience, I wouldn’t let that worry you. There are other skills that you can bring to the table that just happened to be one of mine. In addition to that I had a strong government markets background. So I understand Good Medicaid, Medicare, working with CMS how the government works, how reimbursement works in the government market space. And that’s a skill I brought to the table, and then more generically, how payers think. So as I entered board service, what I found is that I was most attractive to the provider side of the house, because they wanted to understand the payers space. How do payers make decisions? How do I, as a provider, navigate that opaque world of payers and insurers, and those are things that I could bring with me into my board service. So that’s on the giving side.
On the receiving side, you know, to your point, one of the things that I was looking to get out of board service was an opportunity to stay engaged in the healthcare space, all of us are involved in a very exciting industry. And it’s ever changing, and it’s ever evolving. And for me, I didn’t want retirement to be the end of my involvement in healthcare. So first and foremost, getting on various health care boards has enabled me to stay engaged in this industry, and what a year it’s been. Secondly, it’s given me an opportunity to learn a lot. To your point earlier, Marjorie, what I found in my career as a payer, because of my general management, background and focus, I tended to be a mile wide and an inch deep. But as I got involved with various companies, I got to go deep into the specific service that they’re providing in the broad world of health care. So each of the companies has a particular focus, and it’s allowed me to dive deeper into those areas.
I love that because what you’ve described is, it’s a little bit like a puzzle, like the board has to solve a puzzle. And so the board members each bring something a little bit different, and you with your unique skills and background, bring a piece to that, but you don’t have to bring everything to that, right. It’s that it’s the total makeup of the board. It’s so important, because I think many of my audience, most of my audience are physicians or other clinicians, and many are women.
And I think many women, especially women, physicians, we hold ourselves to such a very high standard of performance, that there’s a dark side to that, which is a tendency to undervalue yourself and to say, I wouldn’t be ready, or what do I bring to the table? You know, why? How would I make a contribution in this mysterious world of the boards, but but I think more than likely, people actually have quite a lot that they would bring to the table, even if they don’t have a background like you in the C suite or with Profit and Loss experience.
Can maybe we could take a step back, actually, and let me ask you a little bit about it since this is such an unknown world for many of my audience, what does the board do? Like? Why would you want to be part of it? And what are you doing there?
Yes, that’s actually a great question, Marjorie. And actually, it really opens up the discussion on the different types of boards that are out there. So the boards that we tend to think of most readily when we say board director are the large publicly traded companies, you know, companies whose stock is traded either on the New York Stock Exchange or on NASDAQ. And those are certainly very enviable positions, and certainly worth pursuing. In those capacities, you do tend to focus on governance. So we are there as a board to provide a level of oversight on behalf of the shareholders. And so we review the financials, we review the strategy, our goal is to ask the right questions to make sure that management is really, truly thinking through the direction that they’re moving in.
And so it is much more of an oversight or governance type of role. And very often, in addition to sitting in on the board meetings, you’re also involved in various committees, maybe an audit committee, a nomination and Governance Committee, a compensation committee, those are all very typical in a publicly traded space.
But there are lots and lots of board opportunities outside of the publicly traded space. Private Equity, privately owned companies and nonprofits are three other areas that come to mind. So from a private equity standpoint, there are something like 2700 private equity companies in the United States today. And they invest in a variety of companies that could be small, medium, or very large. And very often what they are looking for, to your point earlier about complementary skills. The private equity companies bring a lot of investment and financial expertise. to the table, but very often they don’t have domain knowledge in the specific company that they’re investing in. So it might be a pharmaceutical company or a durable medical equipment company, or healthcare provider or healthcare services company. And so they are going to look around to find people who have those complimentary services and capabilities that can add to the discussion.
Similarly, on the private side, you know, privately held companies don’t need to have a board of directors, the owners make the decisions. They provide their own governance because they own the company. But many of them are stupid enough to know that they don’t know everything. And so very often, they’ll assemble what’s called a board of advisors who come from different walks of life, and can just give them some different ideas and different perspectives, on strategy on leadership development, on compensation, there’s a whole range of topics that come up for discussion based upon the owners of that company.
And then of course, you have the nonprofits, and those can range from small charitable nonprofits up to some of our big health care delivery systems today. And they too, are looking for people that have a variety of different skills and experiences to help round out the team that is supporting the executive committee.
That’s so great. I mean, the common threads is I feel like I’m hearing them is whether it’s a corporate board or a nonprofit board, it’s an advisory and a governance. It’s asking those questions, it’s not executing or doing so to speak, right, is it helping to understand is the company doing what it should be doing? And have we thought of all the ideas and then you, you give that back to the executives of the company, and, and that’s their job, then right is exactly. And that’s one of the transitions that people need to go through. When you move from an operator role within a company in a management type of capacity into a board role. The expression is, you know, “eyes in and fingers out”, because you need to keep your eyes and ears open, so that you know what’s going on, you’re asking the right questions, you’re providing the right governance, but we have to make sure that we don’t succumb to the temptation to metal, because it really is the leadership team’s job to actually run the company and to and to manage.
And so there is a balancing act there that needs to be kept in mind, especially for brand new directors moving into those roles love that eyes in and fingers out. That’s a great little saying. So I myself have been on a couple of nonprofit boards. And and I know that many of my physician listeners have probably as well. A patient advocacy board, for example, I’m the director of women in my specialty, an organization there, I’m a director on board, what would you say is the sort of transferability or relevance of that kind of experience?
Yeah, that’s a really good question. And it’s one that’s often asked by people who are looking to move into their very first board role, because many of us do have experience with either charitable or community based boards. And I would say a couple of things. One is being on a community or charitable based or doesn’t act automatically make you eligible for a larger corporate board. Because there are some differences.
And but I would say that there is some value to being on those boards. The first is you get used to the concept of how board works. How does a board interact with management? How does a board interact amongst themselves? And you’ll see in the nonprofit world, both good and bad examples of how about boards operate, and you can get learnings from both of those. The other thing that I think that the charitable and community based boards offer to you is the ability to network with people who might be on corporate boards. So even though the board that you’re sharing with those individuals happens to be a nonprofit, many of the other members of those boards do have other board seats.
And so making your interest and your availability known to those board members is very, very helpful because when boards are looking for new members, usually the very first thing that they do is ask existing board members, do you know somebody who would be a good candidate for this board? Because cultural fit is really important. So having raised your hand and taking the time to develop relationships with some of those people that you sit with On a nonprofit board could be the avenue that helps you to begin that journey onto a more formal corporate board.
That makes great sense. I mean, of course, people will always recommend networking, I always recommend networking as a really important part of career strategy. But what you’ve said, I think really kind of brings to life that it’s not so much how many people you know, or even who you know, but who knows you and who will interview when you’re not there, when the question comes up of, hey, do we know anybody that we that would be suitable to come be on this board or be involved in this project or take this job or whatever the case might be? People will ask internally, that’s really great.
That’s exactly right. And I would say, you know, just as a point of reference, I’m currently sitting on eight different boards. And 100% of those opportunities came to me through networking in one way, shape, or form. So I can’t under you know, I can’t overemphasize the importance of networking in the search for award and see,
Oh, that’s great. Eight boards. Wow. That’s why you’re that’s why your LinkedIn title says board member. That’s great. So let me ask a different question that I think many people have. And that is, you know, very often, we talked about being on a board, we talked about serving on the board. But as you and I talked about, you know, as we were getting ready for this call, it’s not like volunteer service, generally speaking, in the corporate world, these are compensated roles, right? Correct. Can you tell us a little bit about how that is structured? Or is this something a person can make a career of, or second part of a career out of tell us a little bit more about that?
So there are lots of different types of remuneration for board service. I’ll start at the public end of the spectrum, because that’s the most, that’s the easiest to identify. So for most publicly traded companies, you will receive a cash retainer for being on the board for attending the board meetings for being available to the executive team. And then you’ll receive stock compensation, so stock in the company. So clearly, as a board, your goal is to help that company grow and succeed. And therefore, as the stock price rises, your remuneration grows or your compensation grows. And so the publicly traded boards are pretty straightforward.
When you get into private equity and private boards, it can vary pretty dramatically. There is compensation, but it could be cash only. So you might get a, you know, a small stipend for participating on the board on an annual basis, or it might be per meeting. So some boards do it annually, some do it for per meeting, other boards will give you a combination, so you’ll get some cash, but then you also get a little bit of ownership in the company, so maybe as a half a percent of ownership in the company. And then because these are privately held companies, you can’t trade that stock on the on the exchange, like you can’t with publicly traded companies. But the idea is that you would stay on that board door and load the lifespan of say, the private equity firm that brought you on. And at some point, there’s going to be a sale of that company to the next investor. And at that point of sale, you get your payday or your payout for the work that you’ve done for the preceding four to six years. And then there are some companies that give you only stock so you may not be earning any money as you go. But once again, you’re you have equity in the company.
And at some point when that company is sold, you will receive compensation for it for the years that you support it that that’s so helpful, because as you probably know, when you know something about my listeners, and people who don’t really know much at all about board service, these are the kinds of questions that they might you know, scour the internet and search for months and years and talk to millions of people and not really a clear understanding right of how that’s structured. And of course, there sounds like so many benefits to being on the board not only in the way in which you’re able to contribute and shape the industry and make a contribution and grow your network, but also some good old fashioned financial compensation.
That’s right. And, and one of the differences between the corporate world or the clinical world and then the world of board service is this is not a situation in which you negotiate your compensation. So a board is going to determine how much it is paying the the board members and it’s all going to be the same unless of course you happen to chair a committee and then you may get a little bit more but when you start working With a board and are being considered for a position, it’s perfectly okay to ask what the compensation is. But it’s not something that you have to worry about negotiating.
Okay, wow, that is so much that we’ve covered this interview is going to be presented in two parts. So this is the end of the first part you’re gonna want to tune in next week to get the second half of what we’ve covered today, which I think is just a ton is of course, you know, what a board actually does. And the differences corporate boards that are both publicly traded or private, as well as community boards and nonprofit boards. What what the work of the board director actually is why you might want to join a board a bit about compensation, whether you can expect to be compensated and what that structure likely looks like whether you need to bring your negotiation skills to the table, or whether that’s not really part of it. Really, really interesting. And also, of course, the relevance of some of the work that you have done to date knowing that most people listening to this podcast, are not in business and are also not in the C suite. But we have found out that there’s a lot of really relevant skills and experience that you have that are likely highly desirable.
So this is awesome. Next time, we’re going to be digging into some really practical information about how to go about planning your journey, setting yourself up to be a successful candidate and to get on some of those boards. So be sure to join me next time for that this is a discussion that you will not want to miss especially if you’ve enjoyed this episode and your interest is piqued. Next time you’re gonna learn exactly how to get on those boards.
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