High-profile roles come with high-stakes liability in these post-Sarbanes-Oxley times, and serving on a prestigious board of directors is no longer the cushy, mahogany-paneled ride that college buddies of senior executives enjoyed in days of yore. Today, the slightest fiduciary hiccup could find the most well-meaning director doing the handcuffed pinstriped perp walk of shame on CNN.

Sounds attractive, doesn't it.

Then you can imagine the challenge of recruiting highly sought-after executive minds to serve on corporate boards of directors. Even in the presence of generous compensation packages, many board candidates these days actually decline their invitations for a number of reasons.

Chuck Lew, founding partner of the Charlotte-based executive search firm Coleman Lew & Associates, recounted an experience when a repeat client retained his company to find a qualified director to fill a board vacancy. An earlier successful executive recruitment for the multi-billion-dollar company had garnered a lot of interest because the company had such a healthy bottom line and a consummate reputation. The second time around was decidedly different.

"The company specifically wanted someone with Sarbanes-Oxley knowledge on its board. That search was extremely difficult. Same deal. Good, profitable company. The problem was the marketplace," Lew said. "We contacted qualified people, and the majority weren't interested. They didn't want the scrutiny of what could occur if there were problems in the corporation. Also, many were not allowed to serve on a board. Their companies did not want them to take the risk to do the work, nor did they want them to do the work."

Lew, whose firm has been conducting directorship searches for about seven years now, says the current governing board recruitment trend is moving away from traditional cronyism toward a much more scientific approach. Companies are looking for specific skill sets in extremely competent individuals who are positioned to make meaningful contributions. These people also must be willing to undertake not only the work and time demands but also the risks of serving. And some qualified candidates are prohibited from serving on boards by their employers' bylaws.

Competition for A-listers to serve on corporate boards is fierce. Industry officials have said that search firms recruiting for top Fortune 500 companies experience an average turndown rate as high as eight-to-one. For such board candidates, offers to serve are not significant events and even may be routine. Across the corporate spectrum, about half of leading board prospects decline offers to serve on boards.

"That is the biggest challenge," Lew said. "It will take 50 percent more time and work than a normal search because so many people will not be interested or will be restricted. Many already will be on a board or two and not want to serve on another board on top of that."

In his 2003 book, Saving the Corporate Board: Why Boards Fail and How to Fix Them, author Ralph Ward, an unabashed cynic, likened the corporate leadership structure in many instances to that of presidential elections.

"The board of directors has long been to business what the electoral college was to presidential politics," he wrote. "Both, according to musty old documents, were technically the true powers in their spheres of influence but had long since faced to irrelevance, merely rubber stamping decisions made by more famous figures."

Ward was referring, of course, to the 2000 U.S. presidential elections, which labeled the electoral college a pawn in "a crisis of American democracy." Then, over a concise 225 pages, he explains his negative posturing as well as makes recommendations for fixing a model that won't soon disappear.

Naysayers aside, a 2004 Georgia State University study determined that public companies with independent boards of directors performed exceedingly well, producing significantly higher yields and profit margins. That finding was corroborated, in part, by research the same year from MIT Sloan School of Management, which found that companies that used information technology to strengthen board practices generated 25 percent greater profits than firms with less sophisticated governance methods.

Authors Frederick D. Lipman and L. Keith Lipman, in their 2006 book, Corporate Governance Best Practices, observed, "The benefits of good corporate governance are longer term, whereas the costs of good corporate governance are incurred in the short term. Executives who are focused on short-term results may see only the costs and not the benefits."

"Governance has become much bigger than it used to be," Lew said. "Our whole field of expertise is finding leaders that have competency and high levels of integrity and provide sound leadership."

Lew first became interested in leadership while a young Marine in Vietnam with the misfortune to be assigned to a unit headed by a timid, broadly ineffective leader.

"We had a lieutenant who was a company commander who was below average. He was scared to death and inexperienced. By the time he came back from the hospital after being injured, we had already figured out what to do without him."

Although members of Lew's unit eventually learned to fend for themselves, the lack of strong leadership, and the vulnerability it created, left a lasting impression.

Director searches, not unlike successful military missions, require thorough and methodical reconnaissance. Many businesspeople call it "due diligence."

The Coleman Lew firm begins the process by meeting with its clients to develop a list of specifications and desired skills. Careful listening is essential.

"I prefer to meet with directors independently rather than go into a meeting and meet with all of them at once," Lew said. "Then we have conversations about what we are looking for in conducting a proactive search. As we develop this long list, we go out and interview prospective candidates. We provide information from those interviews to clients in writing. And we thoroughly verify all information related to education and job history."

"If you start to see any inconsistencies, it really raises our antenna," Lew said. "The last thing we, or the company we represent, want is to have egg on our face, ... or the wrong directors."

Because many candidates may not be the right fit or find that a particular opportunity does not suit them, Lew said it is essential to devote the utmost attention to relationships with executive and director candidates. Those passed over for one post may some day soon be a better fit for another client company, and it is important to keep those avenues open.

Companies looking for meticulously screened candidates need to seek out what California consultant Ed Merino called a third-party recruiter with a "golden Rolodex." Indeed, Lew is ardently protective of his own golden Rolodex.

"We approach the process with kid gloves," he said. "We have to treat these candidates extremely well. That part is very important. There cannot be any hard feelings."

Author Ward says firms specializing in board/director searches represent a growth market. As the level of scrutiny of corporate boards increases, it is prudent to use professional search firms to winnow the field of candidates. It's equally important to be realistic with expectations. Never assume a search firm can go out and reel in a Jack Welch or Lee Iacocca. Availability is often limited by geography, industry, and other factors.

Dr. Ram Charan, a Harvard-educated expert on governing boards, insists that addressing governing board vacancies piecemeal and single-mindedly is myopic. In his 2005 book, Boards That Deliver, Charan said that sustaining boards and, subsequently, companies, requires longer-term strategies. Successful leaders can spend as much as 20 percent of their time on "people development."

"Few boards delve into the leadership gene pool below the senior-most level, despite its importance to a company's performance and longevity. That's a mistake," Charan wrote. "Organization competence cannot be left to chance. Boards have a duty to ensure that management is developing a leadership gene pool that is relevant, capable, up-to-date, and diverse enough to allow the company to meet a wide range of challenges. ... Succession candidates are in unnecessarily short supply because many companies neglected to provide the decades' worth of preparation required to build a robust leadership gene pool."

Charan suggested that governing boards can evaluate the ongoing development of their leadership gene pool by exploring the topic about twice a year.

It's tempting, when you are looking for "that special someone," to cast a wide net, such as placing a classified ad. But finding the right director is much more scientific than screening simply for initial goo-goo-eyed attraction or a desire for long walks on the beach.

"Our clients are looking for people who will fit in and be effective in their power structure," Lew explained. "They will provide specific background that they feel is most appropriate to fill a gap. The trend right now is on the financial side. They want financial experts to serve on these boards."

According to recent literature in circulation, the most widely sought director qualities include:

• Smooth rapport and compatibility with CEO and board
• Highest ethical integrity and vision
• Strong track record of success
• Financial literacy or accounting expertise
• Technology expertise
• Relative youth, to contribute curiosity and new perspectives
• Sensitivity to concerns of serious, long-term shareholders
• Global marketing experience
• Ability to contribute constructively toward consensus
• Diplomatic communication skills, ability to dissent without being disagreeable
• Intellectual detachment and ability to rise above details to see big picture
• Provable independence from potential conflicts of interest with management

"The director's job is intuitive, not mechanical," Charan wrote. "Yes, directors must read balance sheets and comply with Sarbanes-Oxley's myriad criteria. But the real substance of a board's work requires judgment. Directors must help each other pick up on hints, test instincts, and develop a sixth sense for landing on the important issues."

Diversity continues to be an important goal in director recruitment. The most effective boards have a diverse mix of individuals, not only by gender and ethnicity but also by skills, personalities, and aptitudes.

Another challenge in director searches is discriminating among myriad qualifications at the level of excellence already evident among candidates.

"Director candidates already are quite accomplished people. They got where they are because of a lot of things. They already have made a contribution and have earned a certain status," said Nick Lomax, a partner at Coleman Lew. "If you are looking at someone who is concerned with the prestige, then you are looking at the wrong person."

A 2002 Korn/Ferry study revealed that the average Fortune 1000 board member devoted about 183 hours a year to board work. That's a minimum commitment of well more than a month's worth of work. It's significant yet still insufficient time when board members today increasingly are expected to inspect and be responsible for every crossed "t" and dotted "i" coming from management. Directors are extremely pressed for adequate time to execute their responsibilities.

Securing such high-quality leadership during these competitive times comes at a price for companies seeking it. Coleman Lew Partner Jim Bostic said that compensation for directors is significant these days, upwards of $50,000 in some cases.

"Director compensation varies from company to company," Bostic said. "Frankly, it is probably more important for you to decide whether you are going to be on the board than what they are going to pay. ...

"I think most companies tend to be fairly competitive with other companies in their industry."

"Most directors are compensated in a competitive fashion," Lew added. "They also have stock options so their interests are aligned with the shareholder."

To say that Sarbanes-Oxley and its rules for financial talent have changed the paradigm of director recruitment is an understatement.

Author Ward contends that the pseudo safety net called a board audit committee is an oxymoron because participants often might be relative laypeople insofar as the company's specific industry and usually receive either poor quality, cumbersome, off-target financial information.

"In no other area is the part-time amateur status of the corporate board more obvious than in the quantity and complexity of financials directors must digest," Ward wrote. "The distracted outside executives who make up a typical corporate board can offer, at most, several hours per month to plumbing financial covenants, audit treatments, and legal opinions – oh, and, by the way, sign this. ... Would a harried audit committee member trying to absorb a briefcase-busting financial report on a flight to his meeting stand any chance?"

Acknowledging this regrettable fact, companies are encouraging stronger communications channels between directors and everyday staffers, as well as turning attention to additional training for board audit committees.

"The new SEC and stock exchange rules put the audit committee in the driver's seat," Ward continued. "But reforms are worthless unless your committee members have a good road map — and know how to drive."

In fact, ongoing financial education for audit committee members may soon become standard.

"Twice this year already, there have been two new SEC rules," Bostic noted. "Today, being on an audit committee requires a tremendous amount of time. We probably meet nine or 10 times a year. If there is an issue, you will meet more often than that. There is always some type of audit committee training that goes on a couple of times a year."

Furthermore, authors Lipman and Lipman recommend that qualifications of audit committee members be reviewed annually by an attorney who specializes in Sarbanes-Oxley compliance. In addition, the law requires companies to purchase sufficient director and officer (D&O) liability insurance to protect audit committee members.

"D&O insurance is a big deal," Bostic said. "What you hope is that you never get sued, you never have a problem, and you never have to use it."

Audit committee meetings, prompted by the demand for greater audit oversight, also are taking longer, perhaps creating subtle disincentives for prospective candidates.

Search firms share with their clients the weight of finding financially qualified candidates for boards of directors.

"We have a fiduciary responsibility to look for the best person, particularly if the client is looking for someone to chair the audit committee," Lew said. "I think the ideal candidate is in his late 50s or early 60s and might be retired but hasn't really retired. There is a fair number of early retirees, and they just don't stop working."

Industry insiders suggest that some audit firms are beginning to offer up their retired partners to serve on audit committees. This is not surprising given the perceived shortage of financial talent. However, in such cases, it is essential to consult corporate counsel to rule out any conflicts and establish candidate independence.

To perform competently in today's high-stakes board room, passively "phoning it in" is largely a thing of the past. Directors are actively and deeply involved. They have to be.

"In many ways, the board is the final firewall against corporate mischief," Ward wrote. And they are keenly aware of that responsibility. And those tasked with assembling a dynamic, cohesive board, particularly for the long term, must consider strategies for succession in their selections.

"It helps with succession to have a strong board governance with the capacity to get the director or chairman to identify needs for strengthening the company for the future," Lew said. "You need an extremely strong executive group so the business can go on to the next generation. A good governing board will help to achieve that."