CFOs in demand in the boardroom
CFOs have never been more prominent in their organizations, or more in demand outside them.
The number of CFOs or other financial executives serving as heads of audit committees on other companies' boards has jumped fourfold in the past ten years. Today, 35 percent of audit committees in the Standard & Poor's 500 are led by CFOs or other financial executives, compared with 7 percent in 2003, the search firm Spencer Stuart reported in its most recent analysis and survey of S&P 500 companies, called the Spencer Stuart Board Index.
Financial executives have supplanted CEOs, as those heads of organizations have sought to reduce outside commitments, Spencer Stuart analysts wrote.
Ernst & Young, too, has tracked the rise of the CFO in nonexecutive board roles, concluding last year that 46 percent of CFOs from the world's largest companies were directors, compared with 36 percent in 2002.
The consultancy's study, "CFO and Beyond," concluding that CFOs are the executives with the most career options of any in the organization.
More than three-fourths (79 percent) of the CFOs surveyed by E&Y told the firm that they are "more in demand than ever for board-level roles."
David Grigson, chairman of Trinity Mirror and a former CFO of Reuters, told E&Y, "The language of boards is the language of finance and value. It's a very easy environment for a CFO to fit into and make a contribution."
CFOs must naturally carefully consider time commitments, however, and some CFOs surveyed, about 40 percent, surveyed by E&Y said that they feel any outside board commitments would be too much, given the demands of their own positions.
Yet the majority of CFOs are interested in gaining different and valuable perspective, and some feel that the additional perspective and different challenges make for a better skillset overall.
"A CFO... can derive real benefit from lifting their head out of their organization and thinking hard about the issues that face another company," Mr. Grigson told E&Y.