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Making the Transition from CFO to NED

CFO NED

There are hundreds of companies looking for Non-Executive Directors (NEDs). However, gaining a board appointment is highly competitive – with there being more candidates than opportunities. Still, if you are a CFO, I have good news; for the majority of organisations looking for a new Non-Executive Director, CFOs & finance professionals are highly sought after.

Why consider a Non-Executive (Board) Directorship?

If you haven’t considered a NED appointment, you should. Studies have shown that those who hold a NED appointment in addition to an executive role: earn more; are more promotable; have greater job security and; are unemployed less. Further, sitting on a board can also help future proof your career, prepare for retirement, redundancy or a career change. Board appointments also help you work more effectively with your own board and facilitate new connections – useful for both business development and pleasure. Oh, and you can get paid – more detail on that later.

Why do Finance Professionals make such attractive NED’s?

Regardless of the scope or scale of the organisation there are five reasons people get appointed to a board. There are of course others but the core ones are:

  1. Prior governance experience – experience working with or on boards
  2. Relevant networks & connections – that can be leveraged by the board
  3. Cultural fit – your ability to work effectively with other directors and the Chair
  4. Passion for the role – an authentic reason for why you want to serve on the board
  5. An executive skill set – demonstrating why your executive skills are relevant

Whilst all elements count equally, it is the 5th point where as CFO or finance professional you have the upper hand.  When considering executive skills required at board level, not all are created equal. The top 3 skills that boards most regularly request are:

  1. Finance & Accounting
  2. Audit & Risk
  3. Legal

In my experience 50% of any board is made up of lawyers and finance professionals – great news for lawyers and accountants – but even they have to work hard to be appointed.

Get ready to be both a CFO and a NED

If you would like to gain a board appointment or develop a portfolio career, there are a number of things you must do in preparation. These include:

  1. Understand intimately what you offer a board. As a finance professional this may seem fairly straight forward. However, it is critical that you understand, and are able to articulate, how your executive skills can serve at board level. A discussion with Board Direction will help you articulate your pitch.
  2. Understand how board appointments are made – Advertisements, Search Firms, Networks & Direct Approaches – they are all avenues to a successful appointment. If you don’t know where to find vacant board roles and how to get appointed, you will find the journey ahead frustrating. Board Direction are Australia’s leading board advertiser with over 1000 board vacancies advertised each year.
  3. It is a journey – don’t expect to get appointed overnight. Keep at it and enjoy the process of meeting NEDs – they are really generous with their time.
  4. Get a Board CV. They are vastly different from your executive CV and they matter. A Board CV alone won’t get you appointed (although they have been known to) but just using your standard CV will likely lose you the opportunity – don’t take the risk. Board Direction have been quoted as ‘CV Experts’ in the press.
  5. Carve out time from your executive career to prepare for the next chapter. Don’t wait too long to make the transition from CFO to NED.

How much might you get paid?

Non-Executive payment are tricky to define as Board Members are remunerated based on a number of different factors. However, a recent study (of top percentile organisations by revenue) found that:

  • Chairs earned as much as $700k and as little as $26k.
  • Non-Executive Directors are paid – from as little as $3k for NfP health care providers up to more than $327k for Banking boards.
  • 30% – 40% of organisations pay additional fees to committee members. For example: Audit Committee Chairs roughly earn twice that of a regular Audit Committee member – $38k and $19k respectively.
  • In addition to Committee, Non-Executive or Chair remuneration, 21% of directors also receive a professional development allowance. The average amount being $3,786 per director.
  • Around 96% of Not-for-Profits have voluntary boards – although your expenses are likely to be covered. More importantly though, you get to sit around the table with some incredibly high-profile and experienced NEDs.

There is plenty to smile about if you are a CFO or Finance Professional. Still, gaining a board appointment can be arduous and time consuming. It can be even more frustrating if you don’t understand the way board appointments are made or how to circumnavigate these ‘rules’.

What Next? Speak to Board Direction

Board Direction, launched and founded by David Schwarz – Australia’s leading board recruitment expert – is Australia’s premiere NED career development and board vacancy advertising firm. We help put people on boards by equipping our members with hundreds of board opportunities and providing the skills, templates, tactics and strategies required to ‘dare them not to appoint you‘. Simple. Contact us for a Confidential Chat.

Board Search Breakfasts

Meet David Schwarz – Australia’s leading board recruitment expert – at one of our Board Search Breakfasts in Brisbane, Sydney or Melbourne and Discover: the FIVE things Chair’s want; the FOUR ways to get appointed; the DOCUMENTS you need to gain a board position.

About the Author

David Schwarz is CEO & Founder of Board Direction – Australia’s leading board advertising and non-executive career support firm. He has over a decade of experience of putting people on boards as an international headhunter and a non-executive recruiter and has interviewed over one thousand non-executives and placed hundreds into some of the most significant public, private and NFP roles in the world. He has been described as Australia’s leading board recruitment expert, is a published author, a regular speaker on the board appointment process and runs Board Search Masterclasses across Australia. He is one of Australia’s Top 10 LinkedIn users with over 20,000 connections. Email: [email protected]