Subsidiary Boards: A First Board Seat While You Are Still an Executive
Many CFOs and senior finance leaders already sit on a board. They just do not think of it that way. They were appointed as a director of a subsidiary, a joint venture or a controlled entity because it came with the job. They sign the accounts, attend the meetings and move on to the next task.
Then, years later, they decide they want a non-executive career. They look at their resume and see no board experience at all. The subsidiary roles are missing, or buried in a line about “statutory responsibilities”.
That is a missed opportunity. Subsidiary board experience is not the same as an independent seat, but it is real governance experience. Used well, it can be a useful stepping stone to your first non-executive role.
What subsidiary and controlled entity boards are
Large groups often have many legal entities. There may be a separate company for each country, each business line or each major asset. Each of those companies needs directors.
Those directors are often senior executives from the parent. A group CFO might sit on the boards of a dozen subsidiaries. A divisional CFO might be a director of the entities in their division.
Joint ventures work a little differently. Each partner usually appoints directors to the joint venture board to represent its interests. Those boards can involve real debate, because the partners do not always want the same things.
Some executives also sit on boards of related entities, such as a captive insurer, a trust company, a foundation or an industry body linked to their employer.
Director duties still apply
It is easy to treat a subsidiary directorship as an admin task. That is a risk.
Being appointed as part of your job does not switch off your duties as a director. In general terms, directors in both Australia and New Zealand carry duties around acting in good faith, using care and diligence, avoiding conflicts and preventing trading while insolvent. The details, and how they apply in a group structure, are specific and technical.
If you sit on subsidiary or joint venture boards, take advice from your company secretary or a lawyer about your duties and protections. Ask about director and officer insurance and any deeds of indemnity. This is not something to assume.
The good news is that this responsibility is also what makes the experience count. You have been accountable as a director, not just as an executive.
Why it counts as board experience
When a nomination committee or search consultant looks at a first-time director, they want evidence that you understand governance from the inside. Subsidiary experience can show that you have:
Been formally appointed as a director and accepted the duties that come with it
Approved financial statements and signed solvency declarations
Worked with a company secretary, board papers and minutes
Dealt with conflicts between the interests of the entity and the group
Worked with joint venture partners who wanted different outcomes
Handled matters such as related party dealings, dividends or capital changes
That is more than many aspiring directors can show. Our guide to building governance evidence before a board role covers other ways to add to it.
How it differs from an independent non-executive role
Be clear with yourself, and with readers, about the differences. Boards will see them, so it is better to show you understand them.
You are not independent. You are there because of your executive role, and your employer can remove you.
The group often sets strategy. Many subsidiary boards approve decisions made elsewhere. The level of real debate varies a lot.
You may not have chaired anything. Many subsidiary boards are small and run by the group’s governance team.
There are usually no fees. It is part of your job.
None of that makes the experience worthless. It means you should describe it accurately and show what you learned from it, rather than presenting it as something it was not.
How to present it on a board resume
Many executives either leave this experience out or list it as a long string of company names. Neither helps.
Group it. If you sit on many entity boards, summarise them in one line: the number, the countries and the type of entities.
Pull out the meaningful ones. A joint venture board with real debate, or a regulated entity with its own obligations, deserves a separate line.
Show what you did, not just where you sat. Approved a restructure. Oversaw a wind-up. Worked through a dispute between partners. Led a capital return.
Keep it in its place. Put it in a governance section, not mixed in with your executive achievements.
Our guide to a board resume that still reads executive explains why this separation matters.
Before and after (illustrative)
This is an illustrative example. The details are made up, so use your own.
Before: “Director of various group subsidiaries as required.”
After:
"Director, 14 group subsidiaries across Australia, New Zealand and Singapore. Approve statutory accounts and solvency resolutions, and oversee entity rationalisation that closed five dormant companies.
Director, joint venture board (50:50 infrastructure partnership). Represent the group’s interests on a four-member board. Worked with the partner’s directors to agree a revised funding model and dividend policy."
The second version gives scale, shows judgement and makes the joint venture experience visible. It is written in the present tense because the roles are current.
Get more from the boards you already sit on
If you are planning a board career, you can make your current subsidiary roles more useful without changing jobs.
Read the papers properly. Treat each meeting as a director would, not as an item to clear before lunch. Ask questions and make sure they are minuted.
Ask for the harder boards. If your group has a joint venture, a regulated entity or a board with outside directors, ask whether you could join it. These boards give you more to talk about.
Work closely with the company secretary. They can explain the governance framework, the group’s policies and how your duties apply. It is free education.
Keep a simple record. Note the key decisions, the issues that caused debate and what you contributed. When you come to write your board resume in a few years, you will be glad you did.
Watch how others chair. Even if you are not the chair, you can learn a lot from how meetings are run well, or badly.
Using it as a stepping stone
Subsidiary experience alone may not win you an independent seat. But it can make you a stronger candidate when combined with other things.
Take on a not-for-profit or community board to show independent judgement
Join an audit and risk committee as an independent member
Complete director education to fill gaps in your knowledge
Talk to directors in your network about what they look for
Our guide to building a board career while you are still employed covers how to balance this with a demanding executive role.
When you apply for your first paid board role, your subsidiary experience becomes part of a wider story. It shows you have been accountable as a director. Your other roles show you can think independently.
How to talk about it in a board interview
Board interviewers may probe your subsidiary experience. Be ready for questions like:
What decisions did that board make itself, and what came from the group?
Tell us about a time the interests of the subsidiary and the parent did not line up.
How did you handle your duties as a director when your manager wanted something done?
What did you learn about governance from that role?
Good answers show that you understand the difference between an executive and a director. That is what the panel is testing.
Common mistakes
Leaving it off. This is the most common one. If you have been a director, say so.
Overstating it. Describing subsidiary roles as if they were independent board seats will not survive a conversation with a search consultant.
Listing every entity. A page of company names tells the reader nothing.
Ignoring the joint ventures. These are often the most interesting boards you sit on.
Treating the duties lightly. A panel will notice if you do not understand what you were accountable for.
Questions to ask yourself
How many boards do I sit on as part of my role, and which ones involve real decisions?
Have I been part of a joint venture board, a regulated entity or a board with outside members?
Do I understand my duties as a director of those entities?
Can I name two or three decisions where I added value as a director?
What independent governance experience could I add alongside this?
Start with what you already have
Many executives are closer to a first board seat than they think. The experience is already there, sitting in a folder of board minutes and resolutions. The work is to recognise it, describe it accurately and build on it.
If you want to turn your subsidiary and executive experience into a clear board profile, see how I approach board resume writing.
If you are a senior executive thinking about your first non-executive role, book a complimentary Clarity Session and we will look at the governance experience you already have and how to present it.
