The main benefit of serving on a board is the opportunity to observe and understand board dynamics from a different perspective.
CFOs are much in demand for seats on corporate boards, largely due to the increased regulatory pressure on large public companies. In fact, in some countries, having a CFO's financial expertise is not only valuable, but is mandatory, points out Jay Nibbe, an area managing partner with consulting firm Ernst & Young. "As companies grapple with a volatile economy and the diverging growth trends of developed and rapid-growth markets, they increasingly want good insights and support for cost, risk and cash-flow management -- three areas of focus that fall squarely within the CFO's skill set."
Over the past 10 years, the percentage of CFOs on corporate boards has risen from 8% to 14%, and when it comes to the role of audit-committee chairs, the jump is significant: from 19% in 2002 to 41% in 2012. However, as the results of E&Y's recent survey of 800 CFOs points out, it takes more than being a capable financial manager to being chosen for a non-executive board position -- a lot more. Corporate boards are looking for people with a diverse range of analytical, technical and strategic capabilities.
Technology skills in particular will be a differentiator for up-and-coming CFOs, especially for those well versed in the various analytics, business-intelligence and reporting tools now available. A fluency with social media also will be a desirable asset for future board members, as will a familiarity with corporate social responsibility initiatives -- the so-called triple bottom line.
The main benefit of serving on a board, according to respondents, is the opportunity to observe and understand board dynamics from a different perspective (75% of responses). The second-most cited benefit is the opportunity to gain exposure to another company or industry (65%), followed by the chance to observe how another organization is run (62%).
"Over the next decade, boards will increasingly value knowledge of rapid-growth markets, analytics and other dynamic technologies such as social media," Nibbe says.
Based on the survey responses, following are eight steps CFOs should take to prepare themselves for a place on a corporate board:
- Develop a coherent resume.
- Take on roles outside of finance and even business (e.g., charitable trusts).
- Network with your peers.
- Develop a personal profile, especially online (e.g., LinkedIn).
- Gain international experience.
- Build relationships across the various departments of the business.
- Don't get stuck at headquarters.
- Start planning now.