Few doubt the importance of treasurers, who manage companies’ lifelines from cash to risk management. And even though in recent years some of their duties have been automated or outsourced, they have taken on new, often strategic roles to still qualify as some of the hardest workers in finance.
But paradoxically, when it comes to advancement, opportunities are scarcer for treasurers than for controllers. Fewer of them graduate to a CFO chair. And when a treasurer spot opens up, treasury-department staffers often are bypassed in favor of outside hires. “Treasurers know that they touch all the cash in a company,” says Blanche Roberts, a senior consultant at Chicago-based Zehren Friedman Associates. “Yet they don’t always feel highly valued.”
Zehren-Friedman conducted a survey in late 2007 on how treasurers, assistant treasurers, and treasury directors perceive their career paths. Among 87 respondents, 52 percent said opportunities within their department were limited, while 43 percent believed they would have to leave their company in order to advance, according to Roberts.
In an analysis of CFO hiring patterns among the Fortune 1,000 that recruiting firm Heidrick & Struggles performed last year, companies that chose internal candidates picked controllers 34 percent of the time; only 14 percent of those promoted were treasurers.
For treasurers, the picture was even grimmer when it came to hiring a CFO from outside the company: a sitting CFO was the choice in 51 percent of the cases. Of the rest, controllers made up 15 percent and treasurers a mere 5 percent.
The preference for controllers over treasurers can be traced to the emphasis on accounting driven by Sarbanes-Oxley, according to Lorraine Hack, a member of Heidrick’s financial officers practice. A shift may be under way, though, as recent CFO searches have tended to put less emphasis on accounting, she adds. That doesn’t mean treasurers — or controllers either — will be getting more CFO jobs, however. The preference has always been for experienced CFOs, but that prejudice has been deepening lately. “Companies have gone more conservative,” says Hack.
The “stuckness” common among treasurers is by no means universal. In the financial sector, for example, treasurers possess the banking knowledge that is their company’s main business and are routinely named CFOs. One recent example is Martina Hund-Mejean, a former Tyco vice president and treasurer who took over the finance organization at MasterCard Worldwide in February.
Blue-chip treasury training programs also stand out as treasurer empowerment zones. Ford, General Motors, and General Electric are known for creating future leaders through such programs, which rotate people through various departments, including operations. Many of these programs’ alumni have gone on to hold CFO and other senior-executive titles, both at GM and at other major companies.
Other companies simply value treasury and tend to rotate future leaders through the group, even if they lack a pedigreed program. “In some companies, treasury is a strategic business partner and a leadership management resource, while in others it is just another operations area,” says Roberts.