Abstracted from: Take A Seat In The Boardroom
By: Prof. Dennis Beresford JM Tull School of Accounting, University of Georgia
Journal of Accountancy - October 2005, Pgs. 104-108
Special skills needed. Distinguished professor of accounting Dennis Beresford, describing his tours of duty as a corporate director, says sitting on a board is like getting a "real-world MBA." The service can be a career-enhancing experience, bringing prestige and generous compensation; but if trouble arises, a director's net worth is at risk. On the boards at two Fortune 500 companies and a large financial firm, the author is a strong proponent of putting CPAs on corporate boards. The Sarbanes-Oxley Act requires that members of the audit committee be financially literate and conversant with GAAP, 10-Ks, annual reports, and proxy statements.
The law also specifies that at least one member of the committee be an expert in financial matters. Who better than a CPA to fill this role? Auditors are increasingly being included at the table. CPAs can be a real asset since most CEOs lack specific knowledge of accounting and frequently cannot even talk the lingo. As a result, the CEO must rely on finance executives for compliance issues. CPAs who are interested in joining boards should maintain contacts with high-profile professionals and let their interests be known. (Two of Beresford's directorships came through personal contacts, a third through an executive search firm that specialized in board searches.)
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