At many companies the CFO is a trusted confidant of the CEO, a valuable sounding board for all kinds of issues. But when CFOs themselves need advice, whom do they call?
Sometimes the CEO, to be sure. Or perhaps the finance second-in-command. And for certain technical problems, such as accounting or legal questions, there are usually specific advisers on call. But what if the CFO worries, say, that the CEO is not attentive enough to financial concerns or is disregarding his advice? For complicated issues such as company politics or the CFO’s professional development, it sometimes seems there are few places to look for help.
Harried finance chiefs bemoan a lack of time for formal networking events with their peers, such as those sponsored by finance organizations or professional groups. “With the time constraints of the job, it’s almost impossible to add formal networking meetings,” says Oreste Petillo, CFO of Environmental Data Resources Inc., an environmental-information provider in Milford, Connecticut, that is a business unit of DMG Information, a subsidiary of a British conglomerate.
The sensitive nature of many CFO concerns further complicates matters. “CFOs live under intense scrutiny and have to be extremely careful what they say to the outside world,” says Laurence Stybel, founder of Stybel, Peabody and Lincolnshire Inc., an executive-placement and career-management firm based in Boston. “They take the issue of confidentiality extremely seriously. They wouldn’t be airing the dirty linen with their barber or their brother-in-law.”
So whom do CFOs call in time of need? Some find confidants outside the company — specifically, peers at other companies who are facing similar issues. Others, particularly at larger companies, turn to finance chiefs of different business units. And some find that sometimes the best advice is closer to home.
Identifying finance peers from other companies has proven invaluable for Andrea Freedman, vice president of finance at Method, a San Francisco–based maker of environmentally friendly cleaning products. “I’ve got a handful of other CFOs in other businesses, most of which are bigger than mine, whom I can call and ask for advice,” she says. “I value people who might be dealing with some of the same issues I’m dealing with but who may be at a later stage.” Freedman’s group of informal counselors includes former bosses and mentors, as well as contacts she has made at conferences. These colleagues can provide guidance on technical finance issues as well as career advice, she says.
Jon Cargill, CFO of $1.4 billion Oklahoma City–based Hobby Lobby, an arts-and-crafts retailer, has a more formal arrangement with two fellow CFOs. The trio met at a local bank function two years ago. “Personality-wise, we hit it off,” he says.
The three CFOs, who are all employed by privately held, noncompeting companies, have since met for quarterly lunches, drawing up group bylaws that include an agreement not to recruit from one another’s companies and a promise to keep all discussions confidential. They discuss a different topic each quarter, sometimes inviting other company employees. “If we’re going to talk about tax issues one quarter, I’ll bring my tax manager with me,” says Cargill. Recently, the group has swapped ideas about risk-management techniques. Benchmarking such shared concerns as the cost of insurance coverage has also proved helpful, says Cargill.