The Change Mariner

Financial executives become a hot commodity in the age of Enron

Finance-Commerce.com

... Under recent rules mandated by Congress following the 2001 collapse of Enron Corp. and similar corporate accounting fiascos, publicly traded companies are now required to have at least one financial expert on their board audit committees. In addition to the Sarbanes-Oxley regulations, Nasdaq and the New York Stock Exchange also sought to improve corporate governance by insisting that a majority of board directors be independent of the firm.

The net effect of the new regulations is that chief financial officers — along with other executives like Jeffries with extensive financial experience — are hot properties for companies looking to select new board members.

“All of a sudden, CFOs are sexy,” said Bob Rollo, leader of the global board practice for Highland Partners, a national executive-search firm with offices in Minneapolis.

But actually landing that financial expertise isn’t always easy. Many public companies keep a tight rein on board participation by their executives, usually limiting them to one outside board. That’s particularly true for CFOs, who often have to tend to the finances at their own firms at exactly the same time other companies and their boards are reviewing their quarterly and annual reports.

With demand for specific skills on the rise, coupled with the added responsibilities and commitment that new and sitting directors are facing, many firms are turning to executive recruiters to help them fill board vacancies.

“There’s no question that Sarbanes-Oxley is changing how boards are structured and the way companies select directors,” said Susan Boren, head of the Minneapolis office of SpencerStuart, another national search firm with a significant board practice. “Maybe the biggest change is that there’s a lot more interest in retaining someone who can do an independent search rather than trying to do it themselves.”

Posted by Norm M. Wada at October 30, 2003 11:58 PM | TrackBack
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