Finding Versatile CFOs: A Tough Recruiting Task
Published: Apr 01, 2009
The job requirements of chief financial officer have expanded greatly over the past few years, and, not surprisingly, the position is harder to fill.
Thanks to a string of high-profile scandals and new rules and regulations put in place to prevent such scandals from recurring, a job that was once a bastion of stability has been thrust into uncertainty and flux. Tenures of chief financial officers are shorter as a result of firings and voluntary departures, and candidates who meet all the new qualifications are hard to find.
"As a CFO, you were always responsible for the integrity of the numbers, but Sarbanes-Oxley certainly raised the stakes," says Bob Dellinger, executive vice president and chief financial officer of Sprint Corp. "The price of mistakes and errors is certainly greater than it's ever been."
In addition to being in charge of risk management, accounting oversight and budget preparation, chief financial officers now are expected to be the conscience of their companies and to instill confidence about the ethical handling of finances and accounting. It is no longer possible to merely be a behind-the-scenes custodian of a corporation's financials. Many finance chiefs say they have to explain the numbers to a wider audience.
"Instead of being just a scorekeeper, to some respects you have to be a little more of an oracle of information," says Keith Hall, senior vice president and chief financial officer of LendingTree Inc., an online lending and realty-services company. "You're pointing out the ups and downs of the business to some people who may be a little more numerically challenged."
For a host of reasons, more finance-chief spots have opened up recently. Some companies have cycled through chief financial officers at a fast clip. AMR Corp., for example, has had two depart in the past two years. "In both those instances those individuals simply left for better career opportunities," says Al Becker, a company spokesman. Other companies, meanwhile, have succeeded in poaching top finance chiefs.
Impatient board members who are also under increased pressure have driven much of the change. "They either come to the conclusion that their existing talent doesn't match up to the new world order, or they want to upgrade," says Peter Crist, chairman of Crist Associates, a Hinsdale, Ill., executive-search firm.
More companies are also eliminating the chief operating officer position after promoting a chief operating officer to CEO, a study by Crist Associates found last year. As a result, more pressure falls on the chief financial officer's shoulders. "What you get is this real strong partnering between a CEO and CFO," Mr. Crist says. "Any good CFO today is much more intimately involved with the running of the business than ever before."
The increased spotlight and responsibilities have made finding capable candidates tougher, says Peter McLean, vice chairman and head of the financial-officer practice for executive recruiter Spencer Stuart. "There is probably more demand than really good talent right now," he says, and chief financial officers a few years from retirement have quit early.
For many chief financial officers, the past few years have brought heightened tensions but also greater visibility and power. In November, Ted Stone stepped down as senior vice president and chief financial officer of Solucient LLC, an Evanston, Ill., provider of information services to health-care companies, to spend more time with his family. Before he left, his changed role was quite apparent, he says. He was embarrassed for the first time in his career to reveal at a cocktail party that he was a finance chief. But he had a new ability to grab the attention of executives, he says. "All of a sudden, it became a whole lot easier to explain to any member of senior management or a board member the importance of conservative accounting."