A top corporate executive serving on another company’s board of directors may provide strategic advantages for both the executive and the company. With the additional perspective gained from unique sets of issues faced by another company, he or she may bring back valuable insights that can help improve strategy and operations. In addition, for the executives themselves, serving on another company’s board can be a valuable professional development opportunity, to the point that some are actively seeking board positions for their top executives to aid their succession planning programs.
It’s well known that CEOs of public companies frequently serve on other boards of directors, to the point that investor advisors have made explicit guidelines about the appropriate commitment to other boards from these individuals. Beyond the CEO however, there is far less research into how many top executives in other positions are on outside boards of directors. Equilar recently undertook a study of CFOs at large-cap companies over the past three years to identify how many also serve on other public company boards of directors.