More boards seek CFOs as new directors.

• Author: McLean, E. Peter
• Position: Boards of directors; chief financial officers

Given their ability to view the "big picture" - an ability surpassed perhaps only by the CEO - it is not surprising that more and more CFOs are finding themselves seated at the boardroom table.

We see A growing demand for CFOs to serve on corporate boards and, given the expected continuation of a number of current trends, we project that even more boards will be making places at the table for CFOs.

Why are boards recruiting CFOs to their ranks? And, perhaps more importantly, what value can CFOs add to boards? These are important questions to consider as director seats open up and boards determine how best to fill them.

Though perhaps initially spurred by the fact that there are clearly not enough CEOs to go around, boards are certainly more open to considering candidates other than CEOs for directorships. While there is still a preference in many cases for active CEOs, these candidates are busier than ever and increasingly face restrictions on the number of board positions they can accept. Moreover, many of our board clients tell us that because they truly seek a commitment of time and effort on the part of directors, they do not want to consider anyone serving on more than a few boards. These restrictions obviously serve to limit the pool of qualified and available CEOs.

Increasingly, boards are replacing their ranks with non-CEO candidates, directors with specific expertise, including those with financial, marketing, technology, and international backgrounds. Compared with some other specialists, CFOs possess the advantage of being able to much more readily see above and beyond their functional area, and most of them have regular boardroom exposure in their own companies. Unlike marketing, for example, finance is a less "containable" function, and naturally spills over into all other areas of the business.

The input of CFOs is widely sought in ongoing debates on such far-ranging and varied topics as global competitive positioning, operational strategies and results, shareholder interests and value, capital utilization and structures, and, more recently, risk management, which many have championed. When the discussion is of critical strategic issues, the CFO will likely be a key contributor.

Given their position as a new center of corporate influence and their ability to view the "big picture" - an ability surpassed perhaps only by the CEO - it is not surprising that more and more CFOs are finding themselves in the corner office as well as...