CFP Board Adopts Key Governance Changes To Strengthen Organization
Changes are part of a broader effort to enhance the work of the organization, which includes recent reforms to its enforcement program
Certified Financial Planner Board of Standards, Inc. (CFP Board) today announced that the Board of Directors recently approved several actions to update and modernize its governance structure and practices, which the Board will be implementing.
The Board conducted a comprehensive governance review, which was informed by the recommendations provided by the Independent Task Force on Enforcement.
“Modernizing our organization – particularly our governance practices, enforcement program and enterprise risk management– is an essential part of our work as a professional certifying and standards setting body,” said Jack Brod, CFP®, 2020 Chair of the Board. “Over the last few months, and with the assistance of consultants from a global consulting firm, the Board discussed and agreed on essential actions to improve our governance of CFP Board.”
The Board recently approved the following actions to improve the structure and operation of the Board:
Director and Board Chair Terms:
- Changing Director term lengths from four years to three years, with an option for one additional three-year term, allowing for a maximum of two consecutive terms.
- Formalizing the transition process, engagement and roles of the Board’s elected leaders (e.g., Chair, Chair-Elect) to expand the continuity of leadership.
- Enhancing its nominating process for Directors by establishing a more formal process for the Nominating Committee to determine the professional skills, experience and knowledge that are needed on the Board. The Nominating Committee will use this information to assess gaps and CFP Board will communicate more formally to stakeholders the recruiting priorities and needs of the organization prior to commencing its selection process.
Scope and Name of Various Board Committees:
- Broadening the scope of the Appeals Committee to include oversight of ethical standards and enforcement. The committee’s name is changed to the Code and Standards Enforcement Committee to reflect the additional scope.
- Broadening the scope of the Audit Committee to include oversight of enterprise risk management. The committee’s name is changed to the Audit and Risk Committee to reflect the additional scope.
- Broadening the scope of the CEO Oversight Committee beyond its current roles in reviewing and approving CEO compensation to include monitoring of all senior executive staff compensation to ensure compliance with the existing policy that compensation and benefits must not deviate materially from the geographic or professional market for the skills employed. The committee’s name is changed to the CEO Oversight and Compensation Committee to reflect the additional scope.
Board Responsibilities and Director Training:
- Defining and documenting more clearly the Board’s roles, responsibilities and organizational monitoring processes.
- Enhancing the Board director training program and the onboarding of new Board committee members and chairs.
“CFP Board establishes, upholds and enforces the competency and ethical standards for more than 87,000 CFP® professionals that benefit the public,” said Kevin R. Keller, CAE, CEO of CFP Board. “These improvements support CFP Board’s ongoing evolution as the professional body for personal financial planners and reinforce the consumer confidence that comes from working with a CFP® professional.”
Certified Financial Planner Board of Standards, Inc. is the professional body for personal financial planners in the U.S. CFP Board sets standards for financial planning and administers the prestigious CFP® certification – one of the most respected certifications in financial services – so that the public has access to and benefits from competent and ethical financial planning. CFP Board, along with its Center for Financial Planning, is committed to increasing the public’s awareness of CFP® certification and access to a diverse, ethical and competent financial planning workforce. Widely recognized by firms and consumer groups as the standard for financial planning, CFP® certification is held by more than 90,000 people in the United States.
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