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In the past, those with a CPA,
an MBA and enough experience under their belt all aspired to the Holy Grail of
finance positions — the CFO. My, how things have changed. Being a CFO just
isn't what it used to be. In the past two years, commotion in both the business
environment and the world in general has produced new and more difficult challenges
for today's CFOs. The job description has changed completely and is continuing
to evolve rapidly.
CFOs of yesteryear were
expected, for the most part, to raise money, cut costs and lead the company in
strategic planning. They reported to the CEO and the rest of the upper management
team. Nowadays, a rash of accounting scandals and the Sarbanes-Oxley Act have
added more reporting requirements to their "to do" list. In addition,
a CFO now has responsibilities to the SEC, the board and the shareholders.
It is no longer enough to
be an experienced CPA with a Master's Degree — CFOs are in the spotlight
now, more than ever and therefore must exhibit strong leadership and communication
skills. The position now entails more work (and more stress) than ever. And it
doesn't look like it will get easier any time soon.
The effects of Sarbox
The Sarbanes-Oxley Act calls for the CFOs of all public companies to certify financial
statements filed with the SEC (just in case you hadn't heard). In effect, this
has completely reshuffled the priorities of a CFO. Now, they must put compliance
in their accounting and reporting procedures above all else.
In addition, the new act
has created unprecedented risks. Penalties for false certification can include
fines up to $5 million and prison terms up to 20 years for the CFO alone (not
to mention the consequences for the company and the effects on its employees and
shareholders). Because CFOs must now personally certify 10-Ks and 10-Qs, they're
less likely to trust someone else with this task. After all, their neck is the
one that's on the line now. Once again, that means more work for the CFO. And
with the SEC's accelerated reporting deadlines, CFOs and their already overworked
teams now must do everything more accurately and more swiftly, thus increasing
the chance for error. New act, new tasks, new risks, new deadlines — this
is the world of the post-Sarbox CFO.
(Read more about the effects of the Sarbanes-Oxley Act in "Sarbanes-Oxley:
The Gain and the Pain" in this edition of "Working Capital.")
Restoring investor confidence
If the lengthy stock market slump hadn't already done enough to damage investor
confidence, the accounting scandals certainly ensured their uncertainty. Rebuilding
that confidence is now a large part of the CFO's job. But, it goes beyond simply
complying with new accounting and reporting requirements — that is to be
expected. Now, CFOs must demonstrate an ability to guard and increase the value
of their companies. Suddenly, the CFO is a much more prominent member of the management
team. They are the ones current and potential investors will look to when determining
the strength of the company today and in the future, and many CEOs are more than
happy to share this spotlight (and the responsibilities that go along with it)
with their CFOs. The bottom line is, these days, CFOs must be much more than experienced
number-crunchers — they must be savvy, strategic and articulate authority
figures.
Finding (cost-effective)
help
If CFOs weren't busy enough before these changes took place, they're certainly
spread very thin today. Sarbox has created tighter deadlines, more paperwork and
countless meetings with legal teams to make sure they're doing everything by the
book. Plus, now that they're spending more time coddling tentative shareholders,
they have less time to perform the tasks they used to do. To manage their time
more effectively, many CFOs are turning to some inexpensive technology solutions
as well as outsourcing transactions processing and other, more traditional, accounting
and actuarial duties. They are finding (as is also their job to do) that this
is helping to maximize their resources and focus on larger responsibilities while
keeping operating costs at a minimum.
Test drive a CFO position
An increasingly popular way to discover if being a CFO is for you is to try your
hand at a temporary CFO position. This type of position/career choice is challenging,
offers some terrific flexibility and can certainly be financially satisfying.
Companies who hire a temporary or interim CFO usually are either looking to replace
a CFO who has taken an extended leave or when they need someone to take on one
or two particular assignments. For the most part, temporary CFO jobs last from
3 to 12 months, so the downside is the added responsibility of regular job hunting
and the uncertainty that goes along with it.
Not everyone is temporary
CFO material. In fact, many companies prefer someone who has already had experience
as a CFO, although most companies will consider you a candidate if you have a
solid background, good communication abilities and strong management skills. If
you do wish to explore temporary CFO opportunities, make sure you understand the
assignment, the compensation and the scope of your position before accepting the
job.
The rewards
The need for responsible financial expertise is higher than it has ever been.
In addition to needing someone to be accountable for the new reporting requirements,
companies are also looking for experienced CPAs who can keep costs to a minimum.
If you're willing to take on the responsibilities and possess all the right tools,
the job could easily be yours. The demand for top CFOs is rising and the salaries
are as well. However, even with the increased responsibilities and risks, in this
economy, financial compensation isn't always as much as you might expect. Although
CFO base salaries are more likely to show significant increases than other executive
salaries, you may want to also consider asking for alternative rewards, such as
quarterly bonuses, flexible hours/working from home, or paid memberships to professional
associations. The CFO's job has undergone a major metamorphosis in the last two
years and continues to change. However, if you can adapt quickly, take accountability
for your actions and handle the immense workload, the rewards could be substantial.
If you are considering making
the move to a CFO position, whether temporary or permanent, give Ajilon Finance
a call. We've got quite a bit of experience matching up outstanding aspiring CFOs
with the companies that need them. We've also got quite a few
job postings on our website. So contact your local Ajilon
Finance branch today.
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