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Should a CFO be a Board Member?

Elijah Oladunmoye's Profile

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

A reminder that the Board is the strategic overseer of the company AND management (yes, including the CEO). The company is handicapping itself if it appoints the CFO as a member of the board. Imagine by some stroke of stupidity the CFO gets appointed as Chair of the Audit Committee. Now, as a member of the Board of the company's subsidiaries is acceptable.

Topic Expert
Blair Cook
Title: Partner
Company: Executive Finance
LinkedIn Profile
(Partner, Executive Finance) |

No they shouldn't. The Board's mandate is different than Management's. The CFO should most definitely participate in Board meetings, but having them on the Board of Directors undermines the ability of the Board to challenge management in my mind. Keep your CFO off the Board, but not out of the boardroom.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

In my opinion, no. It is taking up a board seat that could be better utilized with additional outside perspective.

Etchu Thomas Atem
Title: Senior Accounts Manager
Company: National Ports Authority Cooperative Cre..
(Senior Accounts Manager, National Ports Authority Cooperative Credit Union ) |

This question could be viewed from the perspective of the corporate governance principles in place within the company and also what the system is in the country where the company is operating. If the system is rules-based, then the answer is obviously no but if its a principles based system then this may be possible.
The overriding principle to make sure that the CFO's independence is not threathened and he should act in public interest as he performs his duties. Therefore, as a qualified professional, the CFO is supposed to thrieve to meet with his professional body's code of ethics and conduct and there would normally be safeguards and ways to manage any such threats arising from holding dual functions of CFO and member of BODs.
I agree with Blair's position as this reflects the position within a rules-based governance system. For example the Sarbanes Oxley Act used in the USA is very clear on the separation of powers between the executive and management to avoid the problem of unfetted-power.

Bryan Fritz
Title: Taoist Finance Officer
Company: Business Consultant
LinkedIn Profile
(Taoist Finance Officer, Business Consultant) |

I will be the devils advocate in the room. It depends, is the company large with a sophisticated board? If so, then I agree with everyone else that the CFO's job is to be an adviser and the board should be overseeing their performance. However, if the company is an ESOP with employees as board members and outside council on the board is lousy then it might be a necessity. I have served as a companies CFO adviser to a board with the companies janitor, shipping clerk and procurement manager, as well as non-financial outside board members. There was not one person who could understand financial performance of the company on even a basic level let alone advise the company in this regard. It would have been beneficial for my position in that circumstance to be a board member. However, this is a unique circumstance and 9 times out of 10 CFO should only advise.

alain oberrotman
Title: director
Company: messagemind,inc.
(director, messagemind,inc.) |

There is no blanket yes or no answer. Circumstances should be weighed on a case by case basis. If the CFO has particular expertise/experience that addresses longer term challenges of the company and balances/fills a gap in skills of the Board, then why not?

For example, a company is undertaking/undergoing major changes such as restructuring or major expansion. Prior experience in these areas can be an invaluable resource/contributor to Board deliberations.

In my experience having served on more than 15 Boards, success is a result of the people on the Board on how well they work together and communicate. Also, they know how to manage conflicts. The CFO might not even be a member of the audit committee.

Thabit Ndilahomba
Title: Chief Financial Officer
Company: FINCA International-Tanzania
(Chief Financial Officer, FINCA International-Tanzania) |

no.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I am not a member of the Board where I serve as the CFO.

That being said, I have been present for all Board meeting and the majority (not all) executive session meetings.

While I don't have an official vote, my opinion is heard and evaluated the same as the Board members.

The same is true for some of the non-profits where I hold a "c-level" type role, if I'm not on the board I don't get an official vote, but my voice is heard.

mushongo kachana
Title: management accountant
Company: University of Zambia
(management accountant, University of Zambia) |

I think for the sake of independence the CFO should not have a seat on the company , board,however should be in attendance when board meetings take place. In most cases they are better placed to explain the financials especially.

Ronald A. Kiima
Title: President
Company: Kiima Incorporated
LinkedIn Profile
(President, Kiima Incorporated) |

It's already bad governance when a public company's BOD is headed by an imperialistic CEO. It's inexcusable when the BOD further includes the CFO and/or other members of management. When I see such bad governance, what I really see is a great short sale candidate as it is only a matter of time before it implodes in a scandal.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

I don't think it makes any real difference in most instances. The majority however should be independent. But if they aren't a board member they need to be present at every board meeting.

The board cannot make good decisions with out the CFO being involved. Doesn't mean he/she has to be a member, but the board better listen to the CFO when it comes to financial matters.

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