Should you worry about the future of the profession?

• Position: Financial management - Special Report

Should you worry about the future of the profession?

Where was corporate finance 60 years ago? In better shape or in worse shape? Where will it be in another 60 years? Every financial executive has an opinion, so, in celebration of Financial Executives Institute's 60th anniversary this year, we invited several FEI members to talk about how they've watched corporate finance and financial management change during their careers. And those careers have stretched from nine to 50 years.

We got a range of responses. The biggest change in the profession? Without a doubt, automation. Six of the eight executives said computers and technology have indeed affected and will continue to affect the role of the financial executive. One even named the developers of the computer as the most influential people in business in the last five decades - "I can think of nothing else that comes close," she says.

Other predictions for the future:

* A shifting of responsibility for health care, retirement pay, and the environment to the government. * Banks numbering 3,000 to 4,000, instead of today's 13,000. * A stock market that is too volatile for investors with less than $1 million. * The demise of the loud, pretentious corporate leader. * Work-at-home employees as the norm. * The need for financial executives who are well read, well traveled, versed in doing business on a global scale, and whose main purpose is to develop well-rounded subordinants.

As you may expect, the eight executives worry most about regulation (referring to it as "crushing" and "strangling"), health care, national and international competition, the changing mindset of employees (and how they can adapt to it), and politics. Most agree that the qualities that made a financial executive good at coping with these problems in the past will make an executive good at it in the future: Topping the list are integrity and good old-fashioned smarts.

Finally, not long ago, a retired member of the Institute commented that he's saddened by a younger generation of financial executives who show a declining interest in socializing with colleagues. We asked our executives what they thought about that statement. Off the record, one called the socializing "schmoozing" and said today's financial executive must rely on more objective information for decision-making, not cocktail talk with a limited group of peers. On the record, one of the eight - whose ages run from 31 to 84 - shares the retiree's disappointment, calling the trend "a pity"; one believes the move away from networking isn't exclusive to the young executive; and one says for him it's a practical trade-off: He either socializes or picks up his children from daycare.

Enjoy reading what your fellow financial executives have to say. We believe their open and thoughtful answers to our questions proves they've spent many hours considering the future of the corporate financial management profession - even before we asked. Have you?

ALFRED W. COOK Retired as Controller and Director of Administration from General Mills AGE: 67 YEARS IN FINANCIAL FIELD: 50 FEI CHAPTER: Baltimore JOINED FEI: 1955

MOST INFLUENTIAL IN HIS CAREER: Professor B. Greidinger of New York University Graduate School. "He opened up the concept of having a financial career in a large, public corporation." MOST INFLUENTIAL IN CORPORATE FINANCE: Presidents and their administrations. "The Reagan administration purportedly |freed' the economy from its regulatory shackles, but caused us to reach today's excesses and national financial problems for which the current recession is a partial corrective." WHERE HIS TIME WENT IN 1970: Involved in overseas acquisitions; installing financial controls in acquired operations; and internally organizing international division management. WHERE HIS TIME GOES NOW: In retirement, handling in-house administration of a small, private company. WHERE HIS TIME WILL GO IN 20 YEARS: "I might truly be retired!" THREE MOST IMPORTANT QUALITIES FOR TOMORROW'S FINANCIAL EXECUTIVE: Integrity and ethical behavior * Thorough professional training * Conservative financial management tempered by flexibility and vision MOST IMPORTANT QUALITIES IN THE PAST: "They do not and should not [differ from those important now and in the future]."

"To me, the most amazing change in corporate finance has occurred during the last 10 years. Sound, conservative financial management has been replaced by a no-holds-barred approach of financing anything and doing so with |new products' that are nothing but glorified variants of equity and debt instruments. This has resulted in the current savings-and-loan debacle, major bank problems, the coming insurance company difficulties, and the general damage done to many individual investors and lenders.

"The trend will continue until the providers of needed venture/risk capital determine that they no longer are willing to assume the risks involved. When that happens, we will resume normal development as a nation, but we will be doing so starting from a lower economic base - the level we reached as a result of the inflation and recession adjustment that's beginning to be felt now.

"Corporations will have no choice but to interact more with regulatory bodies, because the current trends of less retirement protection, less health care protection, and more environmental problems make it impossible to adhere to our philosophy of total individual independence.

"Private enterprise has demonstrated that it cannot master the issues of health care, retirement pay, and environmental protection. Health care costs are continuing their skyrocketing pattern, while private insurers cover only the healthy. Pension funds are being invaded by corporations when those firms believe that pensions are temporarily overfunded or when parent corporations have no other place to get funds. Lip service is given to environmental problems, and compliance is limited to what local and national authorities have begun to impose.

"Thus, these areas will become the domain of government, whether business is in favor or not. In most developed countries, they already are under government guidance or control, and this has solved many of the problems.

"Other aspects of financial management also will deeply affect us: First, a unified tax system will evolve over the longer term, with states assessing a percent of the federal tax (as some states already are doing). As one of the lowest taxed countries in the world, the U.S. will inevitably see taxes increase substantially. The current deficits cannot be sustained indefinitely.

"Second, there now are more than 13,000 banks in the U.S. This is an unaffordably costly system and over the next few decades simple economics will bring this number down to a few thousand, thus reviving our efficiency and cost-effectiveness.

"And, third, internationally we are becoming weaker but continue to be a major player because of our absolute size and military might.

"None of these developments will require major changes in our education and training programs, but they will put future financial executives to herculean tests."

JEROLENE A. DREFS Corporate Controller WPP Group USA, Inc. AGE: 55 YEARS IN FINANCIAL FIELD: 25 FEI CHAPTER: New York City JOINED FEI: 1977

MOST INFLUENTIAL IN HER CAREER: Virgil Hollis and Bob Bracci, both formerly of Sherwin-Williams. "They took a chance on me when there were very few women...