Nigel Clarke As Group Deputy Chairman & CFO. Can Those Roles Be Mixed?

The Musson Group of Companies recently announced that Dr. Nigel Clarke has been appointed Group Deputy Chairman and Chief Financial Officer (CFO) effective October 1, 2013. Congrats on the promotion and well done Dr. Clarke

Dr. Nigel Clarke’s appointment as group deputy chairman and chief executive officer of Musson Group

I thought this was an interesting appointment as they mixed the deputy chairman and chief financial officer roles, positions which I didn’t think were normally mixed.

Upon seeing this, I became very curious about the structure of their board and their whole corporate governance approach, considering that one role, the deputy chairman is on the board, while the chief financial officer (an executive involved in the day-to-day running of the company) is reporting to the board. So it would be like Nigel reporting to himself essentially.

It is well-known that there are advantages to having some of your executives on your board, so it’s not a fully disadvantageous move. However when an executive is also the deputy chairman of the board, questions will arise about the control of the company, the direction of the board and how decisions are made.

This is important because the management of a company needs to be held responsible for their actions and they are normally supervised by their board of directors. With the CFO in such an influential board role, he would essential have control of the board and also the company, which would essentially mean that they could do as they like. However Musson is not a publicly listed company, so they may not have that concern as it relates to reporting to shareholders.

Not An Uncommon Move

Additionally, while my interest was initially piqued by this appointment, I have since realized that it is not that uncommon of a move either. There were a few companies observed that had a similar structure. Internationally, in 2009 Chris Liddell, Microsoft’s departing CFO, became General Motors’ CFO and vice-chairman, while the CEO was the chairman (business insider). Similarly Cablevision Systems Corporation announced on March 11, 2013 the appointment of Gregg Seibert to vice chairman in addition to his current position as the company’s chief financial officer. I am not aware if any companies have this mix of roles locally.

Overall, my research has shown that this can and has been done. I’m sure that for some companies this is definitely a good thing; while others may differ. However I am now more convinced that a CFO with a position on the board can be beneficial as the CFO is normally one that is aligned to the overall strategy and execution of the company’s plans, working closely with the CEO.

What do you think?