Research Shows Board Service Supercharges Careers

Just last week, we discussed how public company board membership comes with increasing personal risk these days, yet executives are still doing their best to secure those coveted positions.
Vector illustration of the businessman superhero - stock vector. EPS 10 file.

You might be asking, “Why?” Why would a well-paid executive spend extra time “on the clock” for a company other than their own? According to a recent study, there may be a clear answer: board membership helps advance executives’ careers and enhances their earnings.

The study, which was conducted by four academic researchers, utilized a sample set of 2,140 high-level executives at S&P firms from 1996-2012.

The researchers matched the executives who were serving on boards with executives in similar positions at comparable companies who had not served on a board.

The results were definitive. In the researchers own words, “We found that serving on a board increases an executive’s likelihood of being promoted as a first-time CEO to an S&P 1500 firm by 44%–and even if they weren’t promoted, we found that serving boosts an executive’s subsequent annual pay by 13%.”

The researchers suggest that executives attain those particular career benefits based on several factors related to board service. For one, serving on a board puts them in highly educational environments. Board members can learn in an environment that’s separate from their own company landscape—thereby giving them a more versatile perspective.

Second, board membership increases the visibility of executives and provides them with new and exceptional contacts. Finally, board service is a sort of “seal of approval” on an executive’s résumé. It tells possible employers that the executive’s leadership is deeply valued and comes with great potential.

The researchers go on to point out, “This finding is important as hiring external CEO candidates is becoming more common, CEO turnover is on the rise, and the majority of newly appointed CEOs have not previously served as CEOs.” In other words, board service helps executives who haven’t yet served as CEO make the leap into the highest level of executive leadership.

Are you interested in serving on a board to build your career and help an organization grow? Check out one of our latest blog posts about securing a public company board position. Even if you’re looking for a smaller board or a nonprofit to serve, the advice is nearly universal.

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