The Role of CFOs on the Boards of Maltese Listed Entities: Implications for Corporate Governance

Aim: This paper investigates the role of Chief Financial Officers (CFOs) in the Boards of Maltese Listed Entities (MLEs). It aims to determine how MLEs prefer to involve their CFOs, assess the benefits and drawbacks of their participation, and examine the broader corporate governance implications for directors, managers, and shareholders. Methodology: A mixed-method research approach was used, including semi-structured interviews with 10 Board Members (BMs) and 16 CFOs from MLEs. Additionally, written responses were obtained from three BMs and two CFOs, bringing the total participant count to 31. Results: MLEs prefer CFOs as regular Board participants rather than full members, ensuring financial oversight while maintaining independent management evaluation. Factors such as Board financial literacy and company complexity influenced this preference. While CFOs were accepted on other Boards with cooling-off periods, concerns were raised about conflicts between current and former CFOs and the challenge of balancing Board commitments with daily responsibilities. Despite these concerns, CFO participation was seen as beneficial for strategic alignment, managerial insight, and shareholder confidence. Small shareholders showed little concern, while institutional investors valued CFO presence. Originality/Value: This study fills a gap in corporate governance literature by exploring the specific contributions and oversight functions of CFOs on MLE Boards. This topic has been largely overlooked. Practical Implications: The findings guide MLEs and other listed entities in structuring CFO involvement in Board activities to maximize financial oversight while maintaining governance balance. Social Implications: Enhancing CFO participation in governance can improve financial transparency and shareholder trust, strengthening corporate accountability and decision-making.