Finance: Corporate Boards Are Looking for a Few Good CFOs

Dec. 17, 2012

The main benefit of serving on a board is the opportunity to observe and understand board dynamics from a different perspective.

Dave Blanchard

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.

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Many CFOs have the financial skills as well as the right combination of analytical, technical and strategic capabilities to become effective board members, says Ernst

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.

About the Author

Dave Blanchard | Senior Director of Content

Focus: Supply Chain

Call: (941) 208-4370

Follow on Twitter @SupplyChainDave

During his career Dave Blanchard has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeek, EHS Today, Material Handling & Logistics, Logistics Today, Supply Chain Technology News, and Business Finance. He also serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2010), which has been translated into several languages and is currently in its second edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.