Two generations of CFOs: how different are they? We asked CFOs under 40 and over 60 years of age how they approach the same challenges, circa 2005. Here's what they had to say
The chief financial officer (CFO) is a relatively recent executive title, if you call 30 or 40 years recent. Some who hold the title today were barely born when it came to life, while others--early then in their careers--had something to aspire to. Prior to CFO, the top finance spot was usually senior vice president, chief accounting officer (CAO) or controller (or comptroller). It was during the 1960s and 70s when the CFO emerged, as a response to the growing interest in accessing capital markets. Elevating the finance role to a C-level post was seen to carry more weight.
By the 1990s and beyond, much was made of the fact that finance chiefs were shedding their "green-eyeshade" image and becoming strategic advisors to and partners with the CEO. Along with the explosion of 24/7 business news and media, CFOs were expected to be media-savvy, smartly discussing earnings, responding to analyst calls and posting webcasts of earnings notices on Internet sites.
Long gone are the days when the finance chief was holed away in a back office toiling over ledgers. Indeed, a large number of today's CFOs lack accounting backgrounds and a certified public accountant (CPA) designation. Today's finance guys and gals (another more recent occurrence) are expected to know all about the business and its customers, the industry and competitive issues, in addition to mastering the necessary finance and regulatory matters.
With the growth of the CFO role, however, came unintended consequences. Some attribute the recent spate of accounting scandals--the Enrons, Adelphias, WorldComs and others--to finance chiefs who forgot their primary role as the company's moral conscience, and to say, "No!"
Also, as the role has evolved, its qualifications have changed. Time was when the young finance or accounting major would aspire to the CFO seat. They'd often start out with an accounting firm and earn their CPA, all the while putting in their time, getting the right experience, getting hired by a client company and making that slow climb to the top finance spot by the time they reach age 50 or so.
In today's companies, CFOs can be in their 30s. Weaned on technology and often light on accounting skills, they contrast with those in their 60s--often lean in technology and strong on the traditional finance background.
To find out how these two generations are handling the job's inherent challenges, Financial Executive invited a half-dozen CFO members of Financial Executives International (FEI) to answer a series of questions about their careers, their experiences and qualifications, their concept of their role and their expectations. These CFOs are from a variety of industries and geographies. What they have in common, besides their CFO title, is a lot more than you'd expect. Three of them are under 40 and three are over 60. (Greg Millman interviewed the under-40s and Ellen Heffes interviewed the over-60s.) What follows are their stories. We invite you, our readers, to be the judge: How different are they ... really?
--Ellen M. Heffes
A CFO/IT Guy