Latest board challenge recruiting CFOs: more and more companies are interested in outside CFOs as directors, often for audit committees. But landing them can be hard, and board service often requires new skills from CFOs themselves.

• Author: Yoder, Steven Van
• Position: Recruitment

Recently, a group of senior financial executives from large organizations in the public and private sectors came together in a roundtable setting at the Longview Solutions User's Group, held at Lake Louise, Canada. The topic: the evolving role of the CFO and the pressures on the finance function today. In the discussions, they found a strong sense that the balance is shifting back to the strategic role--and quickly.

"Finance people are being forced into leadership roles instead of appearing every three months to hit management with the numbers and explain how well, or how poorly, the company is doing," says Dave Murray, CFO at Longview Solutions. "These experts told us it's not an either/or issue of about being steward or strategist. Now, it's all about being steward and strategist."

Those increased responsibilities and skills are in more demand than ever in corporate boardrooms. The Sarbanes-Oxley Act of 2002 beamed a regulatory spotlight on corporate governance, disclosure and transparent financial reporting, which has created new demands on directors. CFOs are now in great demand as key members of corporate boards, particularly for audit committees. But, given the intense pressure on boards, the CFO-type seat is often the toughest to fill.

Not that many recruiters aren't trying. "Sarbanes-Oxley has dramatically affected our business," says Charles King, managing director at Korn/ Ferry International. "Eighteen months ago, executive board searches for financial talent comprised only 10 percent of our total board searches. Today, the number is about 60 percent. Audit committee searches are now at the forefront as the need for sophisticated financial talent has increased."

It goes without saying that unprecedented regulatory scrutiny has had a tremendous effect on companies, their boards, management and auditors--resulting in increased risk avoidance and magnifying the importance of CFOs, who must manage the financial aspects of this change.

CFOs are finding that board membership involves more work, more challenges and more scrutiny, especially when directors are increasingly held accountable for instances of financial mismanagement. The new rules adopted by the stock exchanges and Congress have, of course, heaped new responsibilities and potential risks on corporate directors--particularly members of audit committees.

Despite these new challenges, CFOs are finding that post-Enron board membership is transforming their roles in ways they might not have imagined only a few years ago. While continuing their historic focus on financial accuracy and...