In the past, boards of directors were almost exclusively composed of former Chief Executive Officers, among other C-Suite executives. However, there has been a shift in recent years, with Egon Zehnder reporting that 65% of new board directors were not from the C-Suite. Since 2019, in both the Russell 3000 and S&P 500 indexes, companies have been electing many candidates with prior for-profit company board experience. Although companies do seek to make appointments with prior board experience, they are also seeking directors beyond the C-suite. Companies are still seeking candidates with high qualifications and specialized skill sets. There is also a notable increase in demand for individuals with finance and information technology skills. Specifically,13.8% of directors in the Russell 3000 and 20.9% of directors in the S&P 500 index reported having a technology background.

So, you might be asking yourself: “Do I qualify to be on a board of directors?”

Qualifying to be on a board of directors requires being a leader in one’s field, who has worked closely alongside board directors in the past. It is important to have a thorough understanding of the inner workings of a company, especially financially. According to the 2023 Annual Corporate Directors Survey, 90% of companies found financial expertise to be very important, with the remaining 10% finding it to be somewhat important. Risk management expertise and operational expertise were both found to be very important, by over 50% of companies. Industry expertise, cyber risk expertise, and diversity also remain important to boards. Regardless of prior board membership, it is valuable to boards that candidates have any experience in reforming compensation plans, talent assessment and retention, and strategic initiatives. High-level roles in risk, compliance, M&A, crisis management, product development, marketing, sales and technology are all attractive backgrounds to have.

When seeking board appointments, individuals should focus on what makes them stand out. Research shows that boards continue to seek diverse candidates, with diverse areas of expertise. Diverse ages, genders and races/ethnicities, but also diverse professional, economic, and industry backgrounds all bring new, innovative perspectives into the board room, which allows companies to be at the top of board leadership. These diverse perspectives also improve the ability of companies to creatively and strategically address a variety of challenges.

It is important to note that the decision to serve on a board of directors should not be made lightly. Board directors are essential to companies navigating all kinds of crises, meaning all individuals seeking board appointments should have integrity, loyalty and dedication, on the whole. Given the time commitment, above 200 hours per year on average, individuals should reflect on whether or not they are able to give a board position their all.

In the face of emerging strategic challenges, alongside the ever-changing interests of consumers and the labor force, the range of responsibilities for boards of directors will continue to evolve. With this, there is a heightened demand for a diverse array of skill sets, viewpoints and strategies for success. Companies seeking highly specific skills may look toward candidates without prior board or C-suite experience, meaning a more comprehensive approach to recruitment and more unique hirings.