Three years ago, Greg Cowan was promoted from controller to CFO at professional staffing firm CDI Corp., making the leap that so many accounting professionals dream of: from keeping the books to helping set business strategy. But in November he took what looked like a step back, swapping his CFO title for a newly created role as chief accounting officer.
Cowan, a former auditor, will focus on financial and operating controls, essentially “looking at where we are today and where we’ve been historically.” New CFO Jay Stuart, who had previously worked with the CEO and has been consulting with the firm for the past year, will oversee financial operations and focus on the future. “It’s difficult to explain this role in a traditional sense,” says Cowan, “but you could think of it as taking the CFO charter and putting two financial people on it.”
President and CEO Roger H. Ballou, who in concert with the company’s audit committee created the CAO slot in part in response to requirements associated with the Sarbanes-Oxley Act of 2002 and new stock-exchange rules, is enthusiastic about putting Cowan’s controller skills to work in the new position. “This is a very powerful job that is going to help us be a better company… with a dramatically enhanced focus on control,” he says. While the company has a corporate controller to handle day-to-day issues, Cowan will oversee policy development and all policy-compliance functions, including overhauling internal and external audit processes and reporting to the audit committee.
He will also be “learning from historical financial performance” in order to improve profitability, says Ballou. But best of all, he will enable the new CFO to focus on strategy without getting into trouble. “When you look at the new responsibilities that are being required here [as a result of Sarbanes-Oxley and stock exchange rules], there is a risk that if you don’t specifically delineate roles, you could dilute the ability of your CFO to help you with forward-looking growth, and acquisitions,” says Ballou. “I’d be shocked if other companies don’t move the same way.”
Controllers: Not Remote
There’s no question that accounting skills are back in vogue for CFOs, given the massive amounts of work associated with the new disclosure and governance rules flooding out of the Securities and Exchange Commission and the stock exchanges. In sharp contrast to two years ago, executive recruiters say that a CPA degree is one of the top attributes on their clients’ CFO wish list these days, with experience in initial public offerings and mergers and acquisitions lagging far behind.
Controllers are getting much more exposure, as keepers of the financial statements that nearly every other executive in a company must now sign. Along with CDI, several companies, including BMC Software, Euronet Worldwide, and Galaxy Nutritional Foods, have recently announced that they are shuffling current CFOs’ responsibilities in order to deal more effectively with those requirements. But many experts are skeptical about how long the new emphasis on accounting skills will remain popular, and they warn that playing up those skills may backfire for CFOs when they go looking for their next job.