To join a board at a PE-backed company is an impressive accomplishment. Many past and present executives are eager to serve on boards for a variety of reasons. Boards offer a unique opportunity to build your skill set, network, and learn from veterans of private equity.
But joining a board is a serious decision. Before you sign up for a board seat, step back and assess whether this is the right board for you and if it’s the right time for you to join. Joining a board at the wrong time or for the wrong reasons will be a major time-sink. At worst, you could do damage to a company and your reputation. So before you sign that offer — or even start the search — ask yourself these five questions.
1. Am I Doing This For the Right Reasons?
Make sure you can establish a clear, honest narrative about why you want to join this particular board that revolves around alignment and purpose. Remember that these opportunities center more around professional development than income. For example, many positions offer a limited stipend and no equity. Boards filled with members acting in their own self-interest will have a harder time coming to a consensus, meaning they won’t drive companies to the same level of success.
What’s more, consider how this particular board will strengthen and further your own career. Is it an industry that you want to gain more experience in? Do you admire the CEO’s vision? Are the other board members people you can learn from? While your contributions to the company will undoubtedly be important as you strive to create value, serving on a board is a significant learning experience, especially if it’s your first time serving. Observe how other sponsors create value and the approaches they take to the business. You can use these lessons to complement your own present or future executive roles.