Should You Be Your Own Headhunter?
from May/June 2003
So you’ve got to find a new independent director. Should you hire a headhunter? Most of the directors and CEOs Corporate Board Member interviewed for the accompanying story elected to do the job themselves. One reason is the cost: The big-name headhunting firms typically charge $75,000 to $100,000 for a board-member search. Even a smaller firm may charge half that. There’s also an element of pride. Among those who refuse to pay a search firm: Mac Slingerlend, CEO of Ciber, a systems-integration consulting company in Greenwood Village, Colorado (2002 revenues: $608 million). Slingerlend recently found the new member he was looking for—a former CFO who could serve as audit committee chairman—via old-fashioned networking with his own directors and business contacts.
But the advantages of using a professional are undeniable. You get to pick from a much wider pool; the big executive search firms maintain databases with thousands of résumés. Hiring out the job saves hours of time for board members and top executives. And your search is automatically, unimpeachably independent.
When members of the nominating committee at CenturyTel, a telecommunications-services company in Monroe, Louisiana, looked to replace a retiring director late last year, they hired Spencer Stuart. Board members were so pleased with the process—they were provided with more than 40 profiles of qualified candidates—that they plan to use Spencer Stuart again when another director retires this year.
As for the expense, headhunters point out that the average fee you’d pay a major firm is about what you’d spend to recruit a mid-level executive, and that the cost of replacing a director who doesn’t work out—in money, time, and aggravation—can be far higher. One other reason to use a pro, says Spencer Stuart vice chairman Dan Cruse, is anonymity in the search’s early stages: “It’s a win-win situation. The individual doesn’t know who he turned down but feels honored to be asked. And the CEO doesn’t feel rejected, because his company isn’t identified.”
