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how about a board career?

When James Gorman leaves Morgan Stanley this year he will join a growing number of departing top executives opting to put together a smorgasbord of director, consulting and mentoring roles, rather than take on another full-time position or retire entirely.

Gorman, the bank’s former chief executive, will complete a transitional year as executive chair in December. He has already taken a spot on the Disney board, chairs the Columbia Business School board of overseers and will probably accept other positions.

Noel Quinn, who was replaced as chief executive of HSBC last week, is going down the same path and even used the corporate jargon for such arrangements when he announced his departure earlier this year. He said he would “pursue a portfolio career” because he wanted to “get a better balance between my personal and business life”.

The trend is even stronger among chief financial officers of big global companies, where turnover in the first half of 2024 was at a five-year high, according to Russell Reynolds, a leadership advisory firm. Nearly 55 per cent of the departing CFOs planned to seek board jobs or otherwise scale back, up 15 per cent year-on-year. 

“There is a whole cadre of entrepreneurial people who haven’t retired but are sharpening their saws and reimagining their lives,” said Michelle Seitz, who stepped down as chief executive of Russell Investments in 2022. Her portfolio career includes the boards of MSCI and Fred Hutch Cancer Center as well as her own business. “We’re going to be on less of a linear path and instead embark upon a continuous cycle of learning, working and serving.”

Seitz says ‘there is a whole cadre of entrepreneurial people who haven’t retired but are sharpening their saws and reimagining their lives’ © David Ryder/FT

The enthusiasm for portfolio careers stems in large part from two big societal changes. One is demographic: as people live and stay healthy longer, more of them are seeking a status that puts them somewhere between an 80-hour week and spending their days on the golf course.

The other is corporate: today’s public company chief executives and top leaders simply do not last as long in their jobs as they once did, so there are more unemployed high-flyers who are still keen to take on work. According to data group Equilar, the median tenure for the CEO of the 500 largest US companies has dropped by more than 20 per cent in a decade, to 4.7 years, and Russell Reynolds reported that the time in post for departing CFOs globally has fallen to a five-year low of 5.7 years.

High-flyers are more likely than ordinary employees to want to become involved in mentoring and advising as they age, said Matthew Call, a Texas A&M University professor who studies corporate star performers. “They’re usually so highly identified with their career that [retirement] is kind of like the death of an important, salient part of them. So they turn towards this legacy building as a way to achieve symbolic immortality in their field,” he added. 

Ralph Schlosstein in many ways fits the profile of a top executive who has taken on multiple assignments as a way of staying engaged. After 13 years as chief executive of Evercore, an investment bank, he moved to become chair in 2022. In that part-time role, he has focused on mentoring younger employees, working with a few clients and taking on special assignments. He also serves as a senior adviser at Warburg Pincus, a private equity firm, and is starting a family office with his son.

He said he liked the variety as well as the lower pressure nature of the mix. “When I was CEO, I woke up every morning feeling like I owned everything. The day I stepped down, I wanted to feel that I didn’t own any of my historical responsibilities,” he said.

A middle-aged man in a blue suit stands in a corridor
After 13 years as chief executive of Evercore, Ralph Schlosstein has taken a part-time role mentoring younger employees and leading special assignments © Hollie Adams/Bloomberg

But he warned that some former high-flyers might find the diffuse nature of such jobs frustrating. “It takes a certain mentality to enjoy what I am doing,” he said. “You have to be completely comfortable with the idea that [the company] will define your role, which is to be an adviser, a mentor and a contributor in a way that the place finds useful [rather than] the way you would define it.”

The rising interest in portfolio careers is also starting to show up in the composition of boards of directors of the US’s 3,000 biggest public companies. While the share of board members who are also active CEOs, presidents and COOs has dropped since 2018, the proportion who are former C-suite executives below those top roles has risen by more than a third to 12.8 per cent, according to data from the Conference Board and Esgauge.

But people pursuing portfolio careers warned that board jobs can be a mixed blessing for those who value flexibility. Though the time commitment for a public board is officially only a day or two a month, it can work out to much more in practice because of committee assignments and the time needed to get to far-flung meetings and to prepare. Fixed meeting dates also limit the ability to travel, spend time with family and take on other assignments. 

Harvard Business School professor Arthur Brooks, who has studied executive “second acts”, suggests this rubric when considering which positions to take: “Ideally, a new opportunity should provide a healthy balance of excitement and fear — probably about a 70/30 split — and precisely zero per cent of a sense of internal deadness . . . because that is almost always a signal this is too much like what you are leaving.”

Mohamed El-Erian, who has managed a portfolio career for more than a decade, said he deliberately waited four years after leaving bond house Pimco before he accepted a public board job, in part because he wanted to make sure he was picking the right roles.

“The opportunities are not linear. The more opportunities you accept, the more you are offered because you overcome information failure,” said El-Erian, who is president of Queen’s College Cambridge, and served on the board of Barclays and Under Armour, among other roles. “Write down what you would like your destination to look like and make that your constant . . . it’s a model portfolio to optimise.”

The role of independent director or adviser can also take getting used to for executives accustomed to being in charge.

“To some people it comes very easily. They no longer want to be in the driver’s seat and they have learned over the course of their career that not a small part of their role is to coach and to mentor and to challenge,” said Christian Schmidt, a board specialist at search firm Egon Zehnder. “Others struggle with it a little bit more. They may want to get into a level of detail that might be deemed too much . . . or they struggle to let go of particular issues.” 

The pay for a public board assignment is not insignificant. At BlackRock, for example, the cash plus shares totalled about $400,000 in 2023 for most board members; at restaurant group Denny’s it was more like $200,000. But it is a small fraction of what top executives are paid. The head of BlackRock, Larry Fink, earned $27.6mn last year and Denny’s Kelli Valade received $5.4mn.

“The portfolio income should be a supplement. If this is your retirement income, companies are not going to want you because you aren’t there for the right reasons,” said Rusty O’Kelley, who co-leads the Americas board practice at Russell Reynolds. People who go on boards for the money are usually less independent and they are less willing to stand up.” 

For those looking to build a portfolio career, headhunters and experienced executives have several pieces of advice: start networking before you step down from your full-time job, and perhaps join the board of a charity or private company as a first step. Update your LinkedIn profile and share your private phone and email widely before you leave, so people can find you and learn about you online. Be prepared to invest time or your own money on administrative tasks that your employer once handled, including scheduling, IT and insurance. 

And don’t expect it to all be sunshine and roses. “I know several people who failed retirement. They picked up one or two things that are 10 to 20 hours of work and they were bored stiff and went back to work,” said O’Kelley.

 

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