“In days of old, the Board’s responsibility for managing the talent of their organization began and ended with their top executive, the CEO. Any other responsibilities for “talent management” fell to the CEO. That’s because up until the governance implosion of 2001, it was the governance ‘party line’ that the Board had responsibility for only one employee, the chief executive officer. But a lot has changed since that time. Boards of publicly listed corporations in the United States and elsewhere must now take responsibility, through their audit committee, for the direct hiring, supervision and compensation of an internal auditor. And an examination of the causes for the collapse of such firms as Enron, WorldCom and Tyco has revealed that they could not have happened without the complicity of the Chief Financial Officer, or CFO.
As a result, savvy Boards take a deep interest in who their CFO is and demand increased oversight when it comes to his recruitment, compensation, and termination….”