THE NUMBER of audit committee chairs who have previously held CFO roles has more than doubled in the last decade, according to a new survey.
The survey of 800 CFOs found that 71% of audit committee chairs in the UK have held the top finance job at a company, up from 35% ten years ago, as a result of the demands of a far more complex risk and regulatory environment.
CFOs also viewed the position as the most realistic non-executive destination, followed by the risk committee, remuneration committee and finally membership of the nomination committee.
Hywel Ball, Ernst & Young UK&I assurance managing partner, said: “Accounting standards are moving at an incredibly rapid rate, investor activism is on the rise, and companies face an extremely complex risk and regulatory environment. All of these trends increase pressure on audit committee members and make it more difficult for those with a non-finance background to perform the role.”
However, the report found that many CFOs believe the risk to their own personal reputation is too great to take an external role, particularly as an audit committee chair – with subsequent financial difficulties or accounting irregularities potentially damaging the CFO’s reputation and career prospects.
David Grigson, chairman of Trinity Mirror, and former CFO of Reuters and Emap, said: “I would be wary of taking a board position purely because somebody was thinking, ‘I’ve got a vacancy on my audit committee, I need a finance director.’ Basically, they’re saying that they’re going to undervalue my broader contribution and if that’s the case, then it’s probably not a board I want to be on.”
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Investment in people, tech and businesses impacts on EY's profit per partner figure
If businesses do not take cyber security seriously in their business planning regulators may do it for them, the ICAEW has warned
Dr Richard Willis provides a several thousand-year history lesson of the profession, from origin to modern-day