Agenda - July’s Moves: Financial Expertise Still at a Premium in Director Recruitment


By Katie Wagner

The financial crisis has underscored for boards the importance of recruiting directors with financial expertise.

"With all the bank failures, the need for governance of the books has to increase," says Dora Vell, CEO of Vell Executive Search. Indeed, at least seven directors appointed to fill board seats at large companies in July have financial or accounting backgrounds, including current and former CFOs and CEOs of public, private or subsidiary companies. Such appointments could indicate that boards are feeling pressure to improve the composition of their audit committees.

"The requests coming from boards is that they like to have people with financial backgrounds to go on their audit committee, even if they're not going to join that committee immediately," says Betsy Bruening a board recruiter, who heads The Prout Group's board practice. In all, July saw roughly 32 director appointments and 26 departures at companies with $3 billion or more, according to Agenda research using Audit Analytics' database of director moves. The premium placed on financial expertise for audit committees goes back to Sarbanes-Oxley, which handed audit committees new responsibilities and rules focused on committee composition. Specifically, audit committees without a designated financial expert have to explain why they don't have one.

Some of the new directors appointed in July will join audit committees immediately. On July 9, Host Hotels & Resorts expanded the size of its board and audit committee by one person and appointed two new directors, Willard Brittain and Gordon H. Smith, both of whom will sit on the audit committee. The appointments followed the May 26 departure of Judith McHale, who served on the audit committee. (McHale resigned to serve as undersecretary for public diplomacy and public affairs at the State Department, according to a Form 8-K filed on May 28.)

Brittain, a former partner of Pricewaterhouse Coopers, and Smith, a former U.S. senator, were recruited to the board and the audit committee because of their financial experience, says John Morse, chairman of Host Hotels' audit committee and a member of its nominating and corporate governance committee. The new directors' financial experience includes Brittain's stint at PWC and Smith's leadership roles at Smith Frozen Foods, a private company, according to Morse. Brittain also chairs Tutor Perini's audit
committee, is chairman and CEO of private company Preod and is a director of other public boards. Other similar moves in July include PartnerRe's appointment of David Zwiener to its board and audit committee on July 7. Zwiener most recently was CFO of Wachovia.

Citigroup, meanwhile, continues to seek out financial experience for its board. The company appointed Timothy Collins, CEO of Ripplewood Holdings; Diana Taylor, managing director of fund manager Wolfensohn Capital Partners and former superintendent of banks for the New York State Banking Department; and Robert Joss, a dean and professor at Stanford University's Graduate School of Business and former CEO of Westpac Banking, to its board, according to a Form 8-K filed on July 30. Collins will also serve on the board's audit and risk management committee.

"Companies consider it usually best to have someone [on an audit committee] who served as a CFO or spent their whole career in finance, or had served on an audit committee or had a heavy accounting background," Vell says. CEOs are also good candidates to serve on an audit committee because the finance function of their companies reports to them, making them technically a financial expert, Vell adds.

Director Moves From July

Company Director Action Filing Date
Bank of America John T Collins resigned 31-Jul
Bank of America William Barnet resigned 31-Jul
Bank of America Gary L Countryman resigned 31-Jul
Raytheon Stephen J Hadley appointed 31-Jul
Boston Scientific Katharine T Bartlett appointed 31-Jul
Boston Scientific Bruce L Byrnes appointed 31-Jul
Fifth Third Bancorp John F Barrett resigned 31-Jul
Citigroup Diana L Taylor appointed 30-Jul
Citigroup TimothyCCollins appointed 30-Jul
Citigroup Robert L Joss appointed 30-Jul
Scana Joshua W Martin appointed 30-Jul
Burlington Northern Vilma S Martinez resigned 29-Jul
Sante Fe
Marathon Oil Charles F Bolden resigned 29-Jul
Accenture Dennis F Hightower resigned 29-Jul
Fluor Vilma S Martinez resigned 29-Jul
Brightpoint Jorn P Jensen resigned 29-Jul
Brightpoint Jan Gesmar-Larsen resigned 29-Jul
Dana Holding Stephen J Girsky resigned 27-Jul
Dana Holding David Trucano appointed 27-Jul
Reinsurance Group of America Rachel Lomax appointed 27-Jul
Wells Fargo & CO/MN Robert L Joss resigned 24-Jul
Alliant Energy James A Leach resigned 24-Jul
Federal National Mortgage Association Diana L Taylor resigned 24-Jul

Company Director Action Filing Date
Western Union Wulf von Schimmelmann appointed 23-Jul
NetApp. Edward Kozel resigned 23-Jul
PeabodyEnergy Robert A Malone appointed 23-Jul
Brown Forman Donald G Calder retired 23-Jul
V F Richard T Carucci appointed 22-Jul
Halliburton Nance K Dicciani appointed 22-Jul
Jabil Circuit Laurence S Grafstein resigned 22-Jul
Jabil Circuit David M Stout appointed 22-Jul
Northern Trust William A Osborn retired 21-Jul
Nalco Holding Mary M VanDeWeghe appointed 20-Jul
New Jersey Resources Robert B Evans appointed 20-Jul
Occidental Petroleum Carlos M Gutierrez appointed 20-Jul
Continental Airlines Inc/De Lawrence W Kellner resigned 17-Jul
Graphic Packaging Holding Kevin L Davis resigned 17-Jul
Graphic Packaging Holding Kevin R Burns appointed 17-Jul
Biogen Idec Phillip A Sharp retired 16-Jul
Sherwin Williams John M Stropki appointed 16-Jul
Estee Lauder Ronald S Lauder retired 16-Jul
Estee Lauder Jane Lauder appointed 16-Jul
L 3 Communications Holding Lewis Kramer appointed 15-Jul
Oshkosh Timothy J Roemer resigned 15-Jul
Amgen Rebecca M Henderson appointed 10-Jul
Host Hotels & Resort Willard W Brittain appointed 10-Jul
PartnerRe David Zwiener appointed 10-Jul
Universal Health Services Daniel B Silvers appointed 9-Jul
Insight Enterprises Robert F Woods appointed 9-Jul
Cardinal Health John B McCoy retired 7-Jul
Cardinal Health Bruce Downey appointed 7-Jul
Exterran Holdings Stephen Snider resigned 7-Jul
Hewitt Associates Judson Green appointed 2-Jul
Polo Ralph Lauren Hubert Joly appointed 2-Jul
CMS Energy Stephen E Ewing appointed 1-Jul
Nabors Industries Hans W Schmidt retired 1-Jul
Assurant Lawrence V Jackson appointed 1-Jul

Dora Vell is the CEO of Vell Executive Search, a premier retained technology executive search firm in Boston. Ms. Vell is an internationally recognized expert in executive search for technology CEOs, COOs, CIOs, Vice Presidents and board members. She works with start-up organizations through Fortune 50 Firms. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it.