As a joint CPA Canada/KPMG study suggests, CPAs stand to gain from starting on their board journey as soon as they can
CPAs have long been a valued presence on corporate boards and audit committees in Canada. But as a landmark study by CPA Canada and KPMG suggests, many wait until they are approaching retirement or later to become directors.
Here, study lead co-authors Wendy Kei, FCPA and Deborah Rosati, FCPA, join with Gigi Dawe, former director of corporate oversight and governance at CPA Canada, to explain why CPAs should consider board membership much earlier in their careers and why both CPAs themselves and the organizations they choose to serve can gain from their presence at the table.
The CPA Canada/KPMG study shows that CPAs occupy 22 per cent of all board seats at the public companies studied and that 88 per cent of the companies have at least one CPA on their board. What is your take on these numbers?
Deborah Rosati (DR): The fact that 88 per cent of the public companies studied have at least one CPA on their board is impressive. However, I thought that CPAs should occupy more than 22 per cent of all board seats, given the value they can contribute.
Wendy Kei (WK): The study also shows that 30 per cent of the respondents do not have a CPA as their audit committee chair. And I find that concerning, given that audit committees need to consider everything from cybersecurity to compliance, financial reporting and more.
The study also shows the average age of CPAs on boards is 63. Why do many CPAs wait until they are reaching retirement to serve on a board?
WK: Some CPAs are not able to sit on the board of a publicly traded company while they are a partner of an audit firm or prohibited by the company that they work for. This means they can only join the board of a subsidiary, a non-profit or Crown corporation. And most audit firm partners retire at the age of 60 to 62. In addition, CPAs who are working in industry have to obtain permission from their CEO and the board chair. So many people wait until they retire to avoid these conflicts.
Gigi Dawe (GD): Board membership, particularly with non-profit companies, can be tremendously time-consuming as well—not all of the time, but if that organization goes into distress you have to be able to offer it the attention it needs. With certain boards, you also need to be far enough along in your career that you can contribute the required expertise.
What is the advantage of joining a board—particularly earlier in your career?
WK: Serving on an external board gives you a valuable perspective from the other side of the boardroom table. Instead of taking a management view, it’s now your role to review the documents and ask management the questions. For that reason, your organization stands to gain from the insight you develop as well. I’m hoping more organizations start allowing their executive team to sit on external boards to give them that experience at a younger age.
DR: One of our raisons d’être as CPAs is to give back to the community. For that reason, gaining experience on not-for-profit boards can be very valuable and it's never too early to start.
In addition, being appointed [to a board] serves as a real seal of approval—a sign of the credibility you have gained outside your organization. It boosts your career and helps you develop your governance leadership skills. [For tips on how to get ready to serve on a board, see There are many ways for CPAs to prep for a board role, experts say]
CPAs are often asked to be on boards because of their financial expertise. But is there now a greater recognition of the diverse skills they can bring to the table?
GD: People still want to narrow CPAs to numbers. We’ve got to ensure we're communicating that CPAs have a huge role in strategy and in interpreting numbers and information for the rest of the board.
WK: When I began my board journey, I was pigeonholed into the mining industry, because I had gained my experience there. But I kept telling recruiters my skills were transferable to different industries. Now I have had the pleasure of chairing the compensation and governance committee.
DK: It can take time to transition into a new role. It's a matter of helping others understand where you want to go—not where you've been.
According to the study, just over one in four (26 per cent) of CPAs on boards are women, versus 22 per cent for the rest of the companies studied. What are your thoughts?
WK: I was thrilled to see that more than one in four CPAs on boards are women. The figure doesn’t really surprise me, though, because if you're looking for diversity on a board, there are a lot of female CPAs who are highly qualified.
DR: Yes, since I have financial expertise, I get tapped on the shoulder a lot. The conversation goes like this: ‘We need a woman on our board. We need someone to chair the audit committee.’ Those are the starting points. Once I’m on the board, things may evolve, but that is the way it starts, and that’s fine. [To learn how to prepare for a board position, see There are many ways for CPAs to prep for a board role, experts say.]
Where do boards stand in terms of other types of diversity?
DR: It’s only recently that Canadian Business Corporations Act brought in a requirement to track diversity beyond gender. We have a long way to go in building awareness of board membership based on other factors.
Eventually, though, boards should be able to finetune their requirements to include different factors such as age and geographical location.
GD: Having a diversity of skills on boards is extremely important as well. For example, while you might be looking for a board member who understands risk management, it’s even better if they have also experience in strategy and areas such as human resources.
It’s also worth noting that the complexities of board membership and the information members need to possess far exceed what was required even 10 years ago, primarily as a result of the pace of change in the business world. That speaks to the need for continuing education, but also to the need for younger CPAs who are more likely to be versed in data and the other skills highlighted in the new competency map.
Of course, you also need CPAs with more experience. It’s a balance.
WK: I agree. No matter what your age, you have valuable skills and perspectives to bring to a board or audit committee. And your career stands to benefit as well. It’s a win for you, the organization you work for and the one whose board you choose to join.
Margaret Craig-Bourdin is senior editor of digital content with CPA Canada. She is the recipient of many business press awards, and is also a certified member of the Association of Translators and Interpreters of Ontario.
Originally published by CPA Canada's news site.