But can he count? Make sure your CFO is a money guy.
At the same time, it may not come as a surprise that many chief financial officers are business school graduates, not certified public accountants. In the Fortune 500s CFO rankings, business-school graduates outnumber CPAs by nearly two to one, according to a recent survey by CFO Magazine.
When financial reports are questionable, a company's chief financial officer assumes most of the culpability. However, for the chief financial officer--a key post in any organization--the role of corporate bean counter is only part of the job.
"At the end of the day, successful CFOs are those who are viewed as strategic business partners to the CEO," says Charles Eldridge, manager of the chief financial officer practice at Korn/Ferry International, an executive recruitment firm in Atlanta. But even as a strategist, "They have to demonstrate a deep and broad understanding of their company's business," offers Gregg Smith, managing director of The Hollins Group, an African American retained search firm based in Chicago with offices in New York and Atlanta. Chief financial officers have to know the business inside and out. They have to know the business behind the numbers.
But attempts to guard against future financial mishandling within companies may result in a long-lasting shift in the chief financial officer position from business visionary to financial controller. Consider Microsoft Inc. After decades with just one CFO, the Redmond, Washington-based software giant recently named separate chief financial officers for each of its seven business units to handle budgets and set financial targets, among other duties.
If your company is hunting for a finance chief, or if you are considering a top finance position, note these tips from accounting and recruiting experts:
* Get back to the numbers. "What people want now is for us to get back to the basics," says Kim Griffin-Hunter, national president of the National Association of Black Accountants and a partner in the Miami office of Deloitte & Touche, an international accounting and consulting firm. "If I were looking for a CFO," she says, "my first qualification would be: Are they a [certified public accountant]?"
The CPA credentials, designated by the American Institute of Certified Public Accountants, "equate to integrity, trust, and high values," says Korn/Ferry's Eldridge, who notes that many of his clients are beefing up their finance staff with certified public accountants, particularly if their chief financial officer isn't one. The course of study for most business school programs is 18 months to two years. Candidates must enroll in an additional year of accounting study and pass a two-day CPA exam before they can obtain certification. In addition, Eldridge says, most states require approximately 40 hours of education each year to maintain the license.
* Know your needs. Look ahead and be specific. For smaller firms, say with less than $1 million a year in revenues, a strong financial foundation is important. "In a smaller organization, you have to be able to do the foundation right," says Daniel Dennis, managing partner of Daniel Dennis & Company L.L.P., a certified public accounting firm in Boston. That means someone who can "produce good, solid financial statements with an accounting system that works," he says.
Larger firms can be more flexible, but in either case, prepare a shopping list of requirements, Eldridge says. Is your company planning to restructure or go public in the next few years? Then look for someone with experience or expertise specific to your industry.
* Go beyond the resume. In the wake of recent financial scandals, companies have been conducting extensive background investigations, ranging from reference checks to driver's license and criminal background checks to psychological testing and credit checks. "If [a candidate is] behind on paying bills, and this person has access to all of your assets, many companies might feel a little nervous about that," Eldridge says. Executive background checks offered by Atlanta-based Choice-Point have grown extensively. The three-day process costs about $125.
In addition, Hunter recommends that companies check the Securities and Exchange Commission's "Website for any restatements associated with CFO candidates.
Consider the intangibles. In addition to technical skills, leadership is a major factor, experts say. Griffin-Hunter recommends asking CFO candidates about financial projects that they have managed, including the obstacles they overcame to complete them, the outcome of the projects, and whether they were completed on a timely basis. "This person has to be able to say 'no' or 'yes' to the CEO, to the employees, or to the board on financial matters that impact the company and, ultimately, the investors and other stockholders," she says, Furthermore, a CFO must be an excellent communicator and team builder says Smith. This allows a CFO to receive and deliver accurate financial information through the line of communication and continue an ongoing dialogue with the CEO.
* Get experienced help. Eldridge recommends working with an experienced search firm that specializes in conducting CFO searches. Korn/Ferry and The Hollins Group are among them.
Both Griffin-Hunter and Eldridge point out that there are good chief financial officers who are not certified public accountants, and solid corporate finance staffs are usually made up of a mix of both M.B.A.s and CPAs. Some chief financial officers are both. "The truth is you really have to have a moral compass," adds Smith. Eldridge agrees. "Just because you're a CPA doesn't mean you're not going to do bad things," he says, but CPA certification "is almost like a Good Housekeeping Seal of Approval."
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Career News, Chief financial officer|
|Date:||Apr 1, 2004|
|Previous Article:||A new tradition.|
|Next Article:||Frankly speaking.|