But is it worth it for the CFO? Yes, if you use your skills wisely, say executives who value their board service. While each case is unique, finance chiefs are often more able than other executives to avoid disastrous affiliations, using due diligence of the type they’d exercise for mergers or even personnel decisions. “It’s just like hiring someone: you want to talk to all the third parties you can to check their references,” says Frank Borelli, currently audit-committee chair for the boards of The Interpublic Group and Express Scripts. He is also a former director of Marsh & McLennan Cos., where he was CFO for 16 years and is now a senior adviser.
When assessing board opportunities, Borelli interviews a company’s outside auditors and analysts as well as its general counsel. He studies management’s candor during conference calls. And, of course, he checks the limits and strength of the D&O insurance policy. Since retiring in 2000, Borelli has turned down solicitations from three boards.
The quarterly meetings among audit-committee heads, external auditors, and company management that the SEC now requires will offer directors a much better view of accounting practices. A litmus test for potential board members should be whether they fully understand the business they will be overseeing–a clear failing in the case of Enron’s board. “If you find things difficult to follow,” says Borelli, “your nose ought to start wiggling.”
Laskey’s desire to serve on a second board has led him to devise a sort of “trial directorate”: first offering pro bono advice to a company through a technical advisory board, until he’s satisfied the business is all right. While he’s not worried about his personal assets being on the line, he says, “doing damage control is not why you want to be a director.” – Alix Nyberg
To Serve and Protect
Some high-profile CFOs who have seats on more than one board.
|Name||Home Company||Outside Boards|
|Fred Anderson||Apple Computer||3Com, FASB|
|M. Michele Burns||Delta Air Lines||Ivan Allen, Elton John AIDS Foundation|
|John G. Connors||Microsoft||Montana Power, Primus Knowledge Solutions|
|Clayton Daley||Procter & Gamble||Nucor, Boy Scouts of America (Cincinnati chapter)|
|Chris A. Davis||McLeodUSA||Cytec Industries, Wolverine Tube|
|Dina Dublon||J.P. Morgan||Chase Accenture, The Hartford Financial Services Grp|
|Denise Fletcher||Mastercard||Unisys, YWCA (New York chapter)|
|Judy Lewent||Merck||Dell, Motorola, Merial|
|Blythe McGarvie||BIC Group||Accenture, Wawa|
|Robert Ryan||Medtronic||United Healthcare Group, Brunswick|
Sources: Company Reports