It used to be that the surest way to a board seat was to serve as a CEO. Now it might not actually be the best role to have on one’s resume. In a little-noticed but remarkable shift, many firms are skipping the corner suite and looking elsewhere for directors, choking off what once a wide-open path for current and former corporate CEOs.
In fact, recent data shows that nearly two-thirds of the more than 400 director seats filled last year were taken by someone other than a CEO. Experts say since both the pandemic and the racial-equality protests of last year, companies are determined to create boards with more diverse faces and more specific skill sets. With those trends only gaining more momentum,
Charles Elson, a professor of corporate governance at the University of Delaware, expects the number of CEOs on corporate boards to keep shrinking this year. Or, as Elson puts it, “there will be a lot more CEOs playing a lot more golf in the future.”
That said, moving away from CEOs, with all the experience they typically bring, worries some experts. Dennis Carey, a Korn Ferry vice chairman and the firm’s co leader of Board and CEO Services, says CEOs generally bring the most value and impact to boards because “they can relate to problems all companies face by having been in the chair before.” Carey also says CEOs are best positioned to tie all the specialized skills of the other directors together strategically, which is critical to board performance, particularly in light of the ongoing pandemic.CEOs as Directors? Maybe Not.