Andrew Fastow, the disgraced CFO of Enron, possessed a masters in business administration degree. It was a prestigious one, to boot, from Kellogg Business School at Northwestern University in the US. He never became an accountant. Sherron Watkins, the woman who blew the whistle on the Enron scandal and a certified public accountant, never earned an MBA. Ergo, Fastow was more easily corrupted than Watkins.
Avid readers of Scott Turow, the US bard of corporate malfeasance, might see this as a feasible proposition, but hang on a minute. If there were no crooked accountants, then Arthur Andersen, Enron’s once tarnished, now-vanished auditor, would still be sending armies of green eyeshades to pore over company P&Ls. And not every finance exec armed with an MBA drove a dagger into their company. The swing-back toward accounting and away from MBAs could be a long-term trend — or conventional wisdom that stands to change yet again.
For aspiring financial executives and current CFOs looking to pull themselves onto the next rung, hard choices have to made about how to top off their education. The question of whether to spring for that MBA necessarily presents a risk/reward scenario. Earning an MBA means spending precious time and money to win those three letters that once carried such a cachet, and may yet again. But the opportunity cost could be heavy in the current environment of Asian growth. The consequence of taking time away from a growing job may mean a missed chance for advancement. So is an MBA necessary, or not?
The Pendulum Effect
Like so many trends affecting their jobs, CFOs in Asia must grapple with residual effects from upsets in the far-off US market. Financial execs armed with MBAs only and trained as investment bankers became the rage at many large US companies in the 1990s, while accounting and controller functions were delegated to CPA subordinates. The gloss came off this approach after Enron’s fall, and the economic downturn put it distinctly out of fashion. The US Sarbanes-Oxley Act added pressures — and accountability — to companies’ senior executives, specifically the finance team. The M&A market went fallow. Now, with growth returning worldwide, the pendulum is easing back to the middle. Companies are calling for skills that include a mix of accounting, finance, and strategy.
Reflecting the state of flux, the region’s CFOs stand divided in opinion. Some are full-fledged supporters of wonky B-school degrees. “The best CFOs are well rounded,” says Mark Keithley, CFO at IP/Internet network solutions provider NetStar in Hong Kong. “They’re not just CPA-accountants. They’re not just treasurer-MBA-bankers. You’d like to have it all.” Keithley, who is a CPA, a certified internal auditor, and holds an MBA, adds: “A bookkeeper or accountant is a controller, able to close the books and meet deadlines and targets, but he does not necessarily understand what the numbers mean. You don’t want just a numbers cruncher.”