Current and former chief financial officers (CFOs) are increasingly seen as valuable additions to corporation’s boards, according to new research from Ernst & Young.
The firm’s final report is based on a survey of 800 global CFOs and a more in-depth study of the career paths taken by 347 CFOs working at major companies with over $5 billion in annual revenues, as well as interviews with executives, governance experts and academics.
Among respondents to the CFO survey, 79 percent said they believe that their financial expertise has driven an increase in demand for them to serve on corporate boards.
Furthermore, information from the career path study showed that, among the major companies looked at, 14 percent of their board members were current or former CFOs. This represented a considerable increase over 2002, when the figure was only 8 percent.
Over the same period of time, the proportion of audit committee chairs who are former or current CFOs has more than doubled, rising from 19 percent in 2002 to 41 percent in 2012.
“Regulatory pressure is driving a major increase in demand around the world for CFO experience on boards,” Ernst & Young’s Jay Nibble explained in a press release announcing the results of the study. “Additionally, 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.”
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