What does the future hold, for finance and CFOs?

• Author: Marshall, Jeffrey
• Position: FEI@75 - Chief financial officers

If you're old enough to remember the 1960s' cartoon, The Jetsons, you'll recall a very different vision of the "future" than the one we're living in now. The Jetsons had a robot to do housework, and traveled in a kind of mini-pod vehicle that was attached to something like a monorail. Appliances made their everyday lives largely work-free.

The point here is that speculation about the future, however well-informed, can't accurately predict how quickly we'll get there. As much as the world of business and finance has changed in the past 75 years, it probably hasn't altered as much as some might have forecast. And some of the eternal truths about finance keep getting repeated, implying that change is more gradual than it might appear.

Consider some of the thoughts from people in the field years ago. In "The Future and the Financial Executive," in the February 1973 issue of Financial Executive, management consultant Alfredo Amescua R. wrote: "As a top-level professional, the financial executive must have an overall view of the corporation. He has to be more and more sensitive to humanistic values and he must not restrict himself to acting only on the basis of a purely technical analysis of problems."

In the October 1981 issue--celebrating FEI's 50th Anniversary--Edward W. Golden, chairman of Skott/Edwards Consultants Inc., wrote on "The Changing Role of the Financial Executive:" "The continuing challenge in our field is developing people who are by nature somewhat reserved and introverted into positions that call for dynamic human relations skills."

On the growing role of technology, another financial officer said, "The world is swimming a little faster; if the financial executive ever had a green eyeshade, he doesn't have time to put it on anymore."

Indeed, 25 years ago, the top finance job was summed up: "The dynamically changing function of the financial executive has created a demand for a new type of individual to fill what has become the exciting focal point of the American business community. And, men and women (included, finally) will find a job filled with: more pressure, increased visibility, more mobility, better compensation and more opportunity." The article ends: "In short, it's a bull market today for the qualified financial executive. Those who can accommodate the changing demands and meet the challenges of today are assured a bright tomorrow."

What about today's take on tomorrow? Without asking them to get too cosmic, the editors reached out to a host of different people in different realms of finance to get their views on what the future will bring to CFOs and finance departments. Those responses can be broken down into a number of subject areas. Here are their replies:

CFO ROLE

I think the CFO will continue to evolve, with more emphasis on the strategic issues facing the company and a requirement that the CFO be the business partner to the CEO and key operating and functional executives. Compliance and internal controls will likely always be a part of the job, but the expectation for value-added contributions by the CFO to the growth, competitiveness and performance of the company will gain momentum, and I think the pendulum will swing back a bit to balance the role with the CFO's role as a key contributor to the growth, competitiveness and performance of the company. Management and insightful analysis and interpretation of information will be fundamental to the finance function of the future.

--Charles H. Noski, Former CFO and Vice Chairman, AT & T; Audit Committee chair at Microsoft Corp. and Morgan Stanley; inductee in FEI's Hall of Fame, 2006

The way I see it, the public-company CFO job of the future will change in several ways. This is inevitable and already in process, due, in great part, to the Sarbanes-Oxley Act. First, the CFO will need to serve on the board of directors of his/her company, in order to be knowledgeable about every detail of the company. As one who, along with the CEO, signs financial statements and has the liability, the CFO will need to have this broad knowledge, and that can only come by having a board position. I, for certain, would not accept another CFO job of a public company if it doesn't include a seat on the board.

Second, companies will have to pay public-company CFOs significantly higher salaries; thus, CFO salaries will edge closer to CEO salaries that currently may be as much as two times that of the CFO salary. And third, it is likely that more future CFOs will need to be CPAs because of increased regulation. These are some of the changes I see coming for CFOs of the...