Charity begins in the boardroom, report finds
UK Chief Finance Officers (CFOs) are increasingly looking to secure boardroom roles that make a difference to society, an EY report has found.
The report, CFO and Beyond, found that 38% of UK CFOs are looking to become board members or trustees of a charity or cultural institution in addition to their current role. This was ranked as the most popular non-executive role, ahead of non-executive directorship of other companies in the same sector, policy advising to government or chairmanship. The report found UK CFOs more interested in taking on such roles than global counterparts, while 15% already hold a position in the sector. Post their current CFO role, 46% wanted to take up such positions.
Reflecting a growing shift in business culture, CFOs interviewed said such roles may take up less time than other positions while strongly boosting core and new skills.
The report found that the demand for CFOs is increasing across all boardrooms in all sectors driven by greater complexities, regulation and difficult economic conditions. Seventy-nine percent of respondents agreed their financial expertise means they are in more demand than ever for all board level roles.
The report is based on a global survey of 800 CFOs, and a study of the career paths of group CFOs at 347 of the world’s largest companies.
Les Clifford, Partner and Chair of Ernst & Young LLP’s CFO Program in the UK and Ireland, says: “CFOs can make a valuable contribution to charitable roles, because they can apply the discipline and analytical skills that they bring to their core role to create better financial outcomes for the charity, cultural or social enterprise.”
“These findings are also interesting as the CFO community who set the tone on financial probity across UK business are engaged in wanting to make a difference to society, through crucial non-executive positions. This is a positive and deliberate response to the spotlight that is increasingly being shone on business and their role in society, and the need for a more responsible capitalism."
Everyone wants a CFO
The report shows 74% of UK CFOs want the opportunity to take up new board positions. The vast majority have either taken on a supplementary role or interested in doing so. However, nearly 70% of UK CFOs were concerned about the risk of being overstretched. In particular 75% of the CFOs surveyed said understanding board dynamics from a different perspective is the principal benefit of serving on a corporate board. More than half also see it as an opportunity to gain exposure to another company or industry, which enables them to learn lessons that have valuable applications in their core role.
Clifford says, “Regulatory pressure is driving a major increase in demand around the world for CFO experience on boards. In many countries, a CFO’s financial expertise is not only highly valued, but also mandatory. 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.”
CFO in the charitable sector case study
Ritchy Drost, CFO for European Broadband Operations at Liberty Global, says that being a CFO has been an important benefit to his role as a Member of the Supervisory Board of the Alzheimer Foundation. “You can help the organisation balance the short-term goals it has with a more long-term perspective,” he says. “With your training as a CFO, you have a good sense of how to translate the ideas and actions that a charity has into a monetary impact.”
“Though it can be difficult to find the time to allocate to charitable roles, Mr. Drost and others argue that these roles also have a real benefit to their core position as CFO, as well as being potentially less time-consuming than a directorship at a listed company. “By spending time on the board of a very different institution, you gain a much better understanding of how groups work and how decisions get made,” says Mr. Drost. “This has real practical benefit because you learn more about leadership, communication, group dynamics and all the other softer skills that are so critical to the CFO role today.”