The changing role of the CFO: new demands require new fundamentals.

Author:Proctor, Bryan
Position:CAREER - Chief financial officers
 
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Chief financial officers are in the midst of emerging from a rather grim economic period--one in which cost-cutting dominated financial practices. Now that the economic tides are changing, companies are focused on growth and the skills most desired to meet their new business strategies. When a company is expanding service offerings or entering into new markets, CFOs need to exercise the skills necessary to deliver expected results.

Turnover Sparks Job Prospects

Korn Ferry recently published The State of Hiring A Year in Review: Chief Financial Officers in the Korn Ferry 1000. This study illustrates that the onset of general economic improvement and a recovery in shareholder value spurred CFO turnover in 2013. The turnover rate among KF1000 CFOs, those in the largest 1,000 U.S.-based companies, reached a four-year high at 16.4 percent. This is a remarkable 36.7 percent increase since 2010.

Company stability allows for smoother CFO transitions, in which planning and resources ease the switch to either an outside or home-grown successor. Additionally, CFOs are likely to be in a more favorable financial position to transition out when stock prices have stabilized or shown sustainable growth. A prominent uptick in CFO retirements for 2013 represented 36 percent of total departures. This is a notable change from the historical average of approximately 23 percent attributable to retirements.

Financial Talent Faces Fundamental Shift

As the Sarbanes--Oxley Act of 2002 moves farther away in the rear view mirror, the pressure for CFOs to drive growth and shareholder value comes more into focus.

While accounting and compliance expertise is still important to a well-rounded and marketable background, the general trend is for CFOs to acquire and cultivate non-technical skills through financial planning and analysis, treasury and capital markets experience. As this shift becomes more pronounced, some job titles, like Chief Accounting Officer or Corporate Controller, arguably have less weight on a resume for an aspiring CFO.

Opportunities and business environments vary by sector The Korn Ferry study showed certain sectors had more prolific hiring at the CFO level than others in 2013.The industrial and financial services sectors led the pack, with a 19.8 percent and 19.6 percent turnover rate, respectively. Other sectors with notably high turnover activity included technology, energy and healthcare/life sciences. The skills needed to be a desirable and...

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