At a recent Hedley May roundtable, we were delighted to welcome Joanne Wilson, CFO then at Britvic, now at WPP, and NED at Informa; and Alan Stewart, former CFO of Tesco, and now Chair of the Audit Committee at Diageo, Chair of the Remuneration Committee at Reckitt and NED at Burberry; to lead a discussion on whether the benefits of supplementing a CFO career with a NED role are worth the added burden of work.
Over a stimulating conversation, three key themes stood out. We also discussed the all-important transition from Executive to NED. As of early 2023, 25 of the FTSE 100 CFOs hold a NED role at another PLC, 75 do not. In the FTSE 250, 27 of the CFOs hold a NED role at another PLC, whilst 123 do not.
The right NED role can elevate a great CFO.
For those who are able and willing to commit their time, the potential benefits are compelling.
You gain new perspectives on business, the challenges that other industries are grappling with, and how they are tackling these challenges. As a sitting CFO and NED, you can also strengthen and refresh your relationship with your own company’s Board. You gain fresh insights into Board effectiveness and another Board’s approach to decision-making and oversight. Also, you better appreciate what NEDs want and need from executives. For example, the importance of brevity in the pre-reading packs is underlined when you are forced to spend a few of your own Sunday afternoons tackling needlessly long documentation!
From an individual perspective, taking on a NED role is an opportunity to accelerate your personal development and career growth. It can be a stepping-stone to a more substantial CFO appointment and can also help you to prepare for an executive transition to CEO, by offering new exposures and expanding your breadth of responsibilities. Furthermore, the enlarged external network is extremely valuable if you choose to build a broader NED portfolio at a later career stage.