We’re all just recovering from the post-Enron fallout, in shock at the subsequent disappearance of one of the oldest and proudest names in accountancy, and wondering how the profession will ever again seem attractive to the best and brightest graduates. Then the Higgs report comes, along with Sir Robert Smith’s.
But the point is that suitably qualified finance professionals are needed to sit as non-executive directors on the board of Britain’s public companies, and this may be how we are going to restore the concept of the value that accountants can bring to businesses.
The audit committee, post-Enron (and Ahold and indeed many other places with dodgy revenue-recognition policies), has moved from being a tediously boring group meeting to one that is considered to be at the heart of corporate governance.
Where is the flood of candidates going to come from? Being a non-executive director has historically been seen as a bit of a perk, a badge of having ‘arrived’ as a businessperson.
In the post-Higgs, and indeed post-Equitable Life world, this is no longer the case. Non-executive directors have real responsibilities, and the salary for being one, and the extra few thousand pounds for chairing the audit committee, are way out of line with the time required and the risk shouldered.
But CEOs and chairmen are getting less happy about releasing their finance directors to sit on other people’s audit committees now that being a non-executive is no longer about having a few lunches a year.
Headhunters, and indeed finance directors themselves, tell me that their bosses resent the time spent away from the office. That’s a bit hypocritical when those same chairmen and CEOs then whinge about not finding suitably qualified finance professionals for their own non-executive directorships.
I think the candidate shortage will continue for a while.
- Mrs Moneypenny is a former investment banker.
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