For CFOs, the to-do list lengthens.

• Author: Marshall, Jeffrey
• Position: Cover Story

Accounting scandals, the weak economy and integrity issues have raised the stakes as never before. That's an opportunity for top CFOs to prove themselves and their value to their organizations.

It's been about a year since the meltdown at Enron Corp. began in earnest, and what a year it has been. The drumbeat of negative headlines has been almost incessant, and the corporate miscreants and their misdeeds are so well known that few financial managers need a recap. At companies like Tyco International, WorldCom Inc., Global Crossing and Qwest Communications International, the flames may be out, but the embers are still flickering--and may be for some time.

Overlay on these scandals the sickening slide of the stock markets and an economy so weak that sonic economists still fear a "double dip" recession. Earnings at many companies are anemic, and most revisions are downward. Good news is at a premium--almost a complete turnaround from the rollicking years of the late 1990s, when earnings were soaring and confidence was almost recklessly high.

In an era of contraction, reduced expectations and higher market skepticism (if not cynicism or resignation), the demands on CFOs are unprecedented. Financial Executive spoke to a number of executive recruiters about the changing concerns of top finance officers, qualities that are especially important and time altered relationship between a CFO candidate and the hiring company.

Just do it--all of it. If anything, recruiters say, CFOs and other top finance officers are being asked to do more than ever before, even as they are wrestling with new regulatory or legal mandates like the SarbanesOxley Act, enacted this summer, that, among other things, requires CEOs and CFOs to certify the company's financial statements.

"It's a very confusing time. A lot of CFOs are being squeezed," says Allen Galorenzo, a principal in Florham Park, N.J., with recruiting firm Foster McKay Group, a 31-year-old company specializing in the finance field. "They are no longer just financial persons--companies are relying on them for a lot more, and they wear many different hats. They're very much into IT, HR. legal. There will be a lot of people who really can't perform. For the good ones, it's clearly more difficult to attract them to look at opportunities."

"You can almost say today, [companies] are looking for everything," says John T. Gardner, vice chairman of the Board Services Group at Heidrick & Struggles in New York. "I think that clients want a CFO candidate to have a full range of technical financial skills--the control, the treasury, the risk management, the investor relations--plus the strategic skills to be a full business partner with the CEO. I think, in addition, they also need to be an important thought leader and change agent as part of the entire management team.

"And," he adds, "add on that the requirements that these people be absolutely squeaky clean in every aspect."

Gardner goes on: " The breadth of the job is very demanding. They need to have all of those traditional things; yet, no one is saying that CFOs don't need to help companies deliver against firm commitment. They probably need to know the business better today then they ever have. They need to be able, along with the CEO, to ask the right questions, so they need to know the operation. And, some of these additional demands on the CFO are bound to put more pressure on the entire financial organization. So, you are going to see a need for stronger people - not just the CFO, but [in] the next layers down."

Accountability is a huge shadow hanging over many finance organizations. "Years ago, the CFO wasn't being blamed as much as he or she is now," Galorenzo says. "Finance and accounting might not have been the first--it might have been R&D or marketing. Now with all the accounting scandals we've had, it's somewhat like professional sports: If the team does poorly, the manager gets fired. CEOs are...