From CGMA Magazine: Boards are hungry for CFO talent


The appetite for CFOs to participate on corporate boards is increasing—a demand that, if met, could help not only companies, but also the financial professionals who end up in board roles. They stand to gain a new perspective on running an organization, plus general management experience and exposure to other companies or industries.

Current or former CFOs make up 14% of board members, up from 8% in 2002. And 41% of audit committee chairs are current or former CFOs, up from 19% in 2002, according to CFO and Beyond: The Possibilities and Pathways Outside Finance, an Ernst & Young report based on a survey of 800 global finance chiefs. Meanwhile, 79% of CFOs are experiencing increased demand for their expertise on corporate boards.

“They’re generally sought out initially because of finance background and a knowledge of financial reporting and audit risks and that sort of thing,” said Jim Ladd, CPA, CGMA, senior vice president of finance and operations at the Institute for Systems Biology in Seattle, who has served on more than a dozen boards. “But CPAs have a broader background than that, and people discover that.”

Public companies listed in the United States must disclose whether they have at least one financial expert independent of management on their audit committee. This can be both a benefit and a frustration to CFOs. Eighty-one percent of them said finance leaders are good choices for audit committee jobs because of their finance acumen. But CFOs want to make sure their skills in strategic development and other areas are recognized, too.

“Some of them can be a little insulted that the breadth of their experience as CFO is not necessarily recognized,” Gerard Dalbosco, an E&Y managing partner, said in the report.


What do CFOs reap from serving on boards? Three-quarters of survey respondents said gaining general management or board-level experience is a benefit. Other top benefits included gaining exposure to another company or industry (65%) and getting a different perspective on running an organization (62%).

“You get to look beyond the purely financial and think more strategically about a different organization,” Qatar Foundation CFO Faisal Al-Hajri said in the report. “You can also use these roles to play a broader role in society or the community.”

Mick Armstrong, CPA, CGMA, recently agreed to serve as treasurer on the board of directors of the chamber of commerce in Meridian, Idaho, where he is the CFO of Micro 100 Tool Corp. “We as a company are committed to the community and realize that just our business environment, the quality of life for our employees, all is wrapped up together,” he said. “So we choose to be involved in the community.”


A key question any potential board member should ask before considering a seat on a board is whether the organization carries liability insurance for its directors and officers, said Ladd, the Institute for Systems Biology executive. Risk exists even at not-for-profit organizations, so board members should make sure they are protected, he said.

It is also important to make sure you are working for an organization that supports your involvement on an external board, Ladd added. And you need to have the time and energy to fulfill your board duties in addition to your regular job.

Ladd said he does a lot of his board work during evenings and weekends. “I sometimes joke with my wife when I come home at night that I’m starting my second job,” he said. “… But most of the meetings are during the day, so you do have to have an understanding employer. That puts some strain and requires extra time in your life. There is no doubt about that.”

For more, see the following CGMA Magazine articles at

CFOs in High Demand for Board Positions,” by Ken Tysiac.

In-Demand Directors See Pay Rise Nearly 10%,” by Neil Amato.

Jack Hagel, editorial director
CGMA Magazine

CGMA Magazine is published exclusively online at in conjunction with the Chartered Global Management Accountant designation, which was created through a partnership between the AICPA and CIMA. The magazine offers news and feature articles focused on elevating and emphasizing management accounting issues.

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