New Study by Equilar Builds a Case for Board Service as a Valuable Professional Development Tool
REDWOOD CITY, CA (May 14, 2013) – A recent study by Equilar, the leader in executive compensation benchmarking and governance research, found that S&P 500 companies with Chief Financial Officers serving on outside boards outperformed companies where the CFO did not serve on an outside board.
As recently reported in The Wall Street Journal article “Boardroom with a View” and CFO.com, the study explored the prevalence of outside board service among S&P 500 CFOs and the implications on professional development and succession planning processes.
In its Executives on Boards Report, Equilar’s analysis showed that companies where the CFO serves on an outside board had a higher median three-year total shareholder return (19.2 percent) than those that did not (15.2 percent). However the majority of CFOs do not serve on outside boards of directors. In 2012, 102 CFOs in the S&P 500 served on an external board, compared to 234 CEOs.
“Companies may be missing a valuable professional development tool for C-level executives, especially as a part of their succession planning processes in preparing potential CEO candidates,” said Aaron Boyd, Director of Governance Research for Equilar. “Serving on an outside board provides the opportunity to gain exposure to complementary industry strategies and challenges, learn from experienced board colleagues, and further refine leadership abilities.”
The report discusses a wide array of topics, from statistics on the prevalence of board service to key demographic information for these high-profile individuals.
Headquartered in Redwood City, Calif., Equilar is the leading provider of executive compensation data and governance tools for corporations, nonprofits, consulting firms, institutional investors, and the media. As the trusted data and executive solutions provider to 70% of the Fortune 500, Equilar helps companies accurately benchmark and track executive and board compensation, pay for performance results, and compensation practices. In addition, Equilar offers a leading business and event networking solution focused on serving executives and board members. Equilar’s research is cited regularly by Bloomberg, The New York Times, The Wall Street Journal, and other leading media outlets.