Dive Brief:
- Global litigation-finance firm Burford Capital announced Thursday CFO Elizabeth O'Connell is moving to chief strategy officer in a board restructuring, following concerns by investors that her marriage to company CEO Christopher Bogart raises risk.
- O'Connell and Bogart have been married since 1992, and O'Connell has been at the company since it launched in 2009, and has been its CFO since 2017. But board members have grown concerned over the potential for conflict of interest.
- Carson Block, a director at short-seller Muddy Waters and one of the investors to raise concerns about O'Connell's position, said the move is past due. "In a situation so ripe for abuse, the very least the company could do is to have an independent CFO," he told The Wall Street Journal.
Dive Insight:
To date, the relationship hasn't caused trouble for the company, people familiar with the situation told the Journal, but analysts say the company will be better served by reducing the chances of conflict.
"It may have worked for 30 years, but that doesn't mean it's going to work for the next 10 years," Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, is quoted as saying.
Taking over at the CFO role is Jim Kilman, a senior adviser to Burford since 2016 and a former vice chairman of Morgan Stanley.
Block said he'd like to see someone else in the role because Kilman doesn't bring the right background. "Given the complexity of Burford's accounting, the CFO should be an accountant who has demonstrated a strong commitment to ethics," Block said in a Seeking Alpha report. "Investment bankers don't often qualify on that front."
Kilman will stay on for two years, Burford said in its statement. The company also praised O'Connell's experience. "Ms. O'Connell will become Burford's chief strategy officer so that Burford can continue to benefit from her long and deep knowledge of the business," Burford said.
