The other reason companies won’t let their finance training programs languish is Sarbanes-Oxley. According to a CFO magazine analysis of Compliance Week data, so far this year more than 50 companies have disclosed deficiencies in their internal controls related to staffing problems — issues that may lead to failing Section 404 of the act if not corrected (see “Raising Red Flags,” September).
“We’re seeing a number of things in the HR arena that can give rise to concerns — one of which is having an inadequate staff, another is that they’re not competent to handle those responsibilities,” says Stephen Wagner, senior partner and co-chair of Deloitte & Touche’s Sarbanes-Oxley steering committee. A good finance training program may provide necessary protection from adverse opinions on internal controls.
To that end, some companies are looking for new technical skills out of their recruits. “[Sarbox], for some companies, has really pushed systematic development of accounting and finance staff to the front burner — it’s opened issues that have been somewhat dormant for a while,” says Jonathan Schiff, president of Schiff Consulting and founder and facilitator of the Finance Development Training Institute.
At Johnson & Johnson, for example, recruits to the three-year program of rotating assignments will be required to complete at least half of the CPA or CMA components to graduate. “If we don’t have the rules right, we’re useless,” comments Jeff Cacciatore, head of the Finance Leadership Development Program. “We need to up the ante [on training] in order to enhance our credibility.”
In general, though, the basic components of a corporate finance training program — rotating assignments bolstered by mentoring and some type of classroom experience — have changed little since General Electric rolled out its pioneering Financial Management Program in 1919. While companies vary on whom they recruit, how long the rotations are, and how extensive the classroom training is, the basics remain the same across companies as diverse as aluminum giant Alcoa, pharmaceutical producer Abbott Laboratories, and computer-hardware maker EMC.
In fact, when EMC decided to upgrade its program in 2001, it followed the GE model almost exactly. “The opportunity to participate in a training program creates a lot of buzz on campus when we go out to recruit,” says EMC treasurer Irina Simmons of the three one-year rotations and two years of classroom training the company is offering to new finance staffers.
Based on requests from current employees, meanwhile, Citigroup is adding a refresher course on accounting to the “boot camp” it puts its MBA recruits through before sending them off on rotating assignments. It is also offering a new course on using balance sheets and income statements to its CFO University, a finance curriculum available to all levels of staff throughout the company.
Ford says its reengineered introductory program will be basically the same as the old one, except that it will put MBAs through a shorter program and keep a closer watch on new undergraduate recruits, rotating them through different finance roles within a single organization. Unlike some of its peers, Ford hasn’t put a heavier emphasis on technical skills in response to Sarbanes-Oxley, according to the company’s finance recruiting manager, Ashlie Pruett. College recruits “certainly will, at some point in their early careers, have experience with internal controls, but as for having the technical expertise to come in, I don’t think we’ll require they go back and get a CPA or master’s in accountancy,” she says.