When Peter Barker was appointed Asia Pacific CFO for Cisco Systems back in January this year, he knew his first year was going to be a grind. Thanks to the rigors of complying with America’s tough new Sarbanes-Oxley (Sarbox) corporate governance laws, Barker’s first nine months in office have largely been a marathon effort of documenting internal controls and standardizing company processes.
Like many other CFOs, Barker acknowledges that Sarbox is “well-intentioned” and “should help raise investor confidence,” but he also has gripes. For one, the effort of compliance has been expensive. For another, it has failed to show up a single material controls weakness at the $24.8 billion-a-year telecom equipment maker. Equally, he feels that Sarbox rules make it harder for large companies to act quickly and entrepreneurially because every process must be followed to the letter in every instance.
Just as important, Barker believes that the time he’s spent on Sarbox compliance has taken away from the time he and his team could have spent doing other things. In particular, he’s had to sacrifice time spent working on more strategic issues. “Anybody who works for a company impacted by [Sarbanes-Oxley] regulations and claims that their finance team is acting more strategically than in the past has found a cure for the common cold,” he sighs.
Since taking on his current role, for example, Barker has visited just two of the company’s customers. “That’s unacceptable,” he says.
Barker isn’t alone. It’s long been the holy grail of CFOs to cast off their traditional role as back-office bean-counters and financial policemen, and instead to become front-office strategists and business partners. And yet, making that transformation is proving harder than many imagined. The growing burden of ever stiffer corporate governance laws around the world has been a big inhibitor, but so too have other factors, such as the ongoing restructuring of many finance departments. Of course, at some companies, finance chiefs and their teams are contributing to strategy and business development in ever more innovative ways. However, for the moment, such cases remain in the minority.
To help shed light on the situation, CFO Asia carried out a survey in July, asking readers how they spend their time. A total of 522 CFOs, controllers, treasurers, and other finance executives completed the survey. (for a breakdown of participants, see “Accounted For“) The results reveal a handful of insights into the working habits of finance staff. For example, on average they work 53 hours a week and spend 16 percent of their time on the road (see “Doing Time“).
More important, the survey shows that finance teams still spend a substantial amount of time handling traditional tasks such as accounting and reporting, risk management, and tax. Conversely, finance staff spend just 4.6 percent of their time on planning and setting company strategy, only 3 percent talking to customers, and a meager 2.9 percent analyzing potential M&A targets and executing deals. When the results are split out by job title, it’s clear that the CFO’s role is more strategic than, say, that of a controller or head of internal audit, but not by as much as might be expected (see “Time Sheet“).