When Sandra Wijnberg decided to resign as chief financial officer at Marsh & McLennan Cos. in 2005, she had one overriding objective: “I wanted to make sure I didn’t create another crisis,” she remembers.
At the time, the venerable New York insurance brokerage firm was particularly battle-scarred. Marsh & McLennan had lost almost 300 employees in the September 11 terrorist attacks, and in 2004 was sued by then–New York Attorney General Eliot Spitzer, alleging fraud and bid-rigging — a lawsuit that forced the resignation of chief executive Jeffrey Greenberg.
That suit and the subsequent $850 million settlement left the company in a precarious financial situation — something Wijnberg wanted to set right before departing. Consequently, during the eight-month transition period, she took several important steps, such as refinancing Marsh’s headquarters building, implementing a new $1.2 billion five-year credit agreement, and creating a $440 million discretionary pension contribution.
“We built up cash on the balance sheet and put the company in a financial position to ride out the difficult times until the operations regained their ground,” Wijnberg says. “That was probably one of the greatest gifts I could give them.”
As Wijnberg can attest, resigning from a CFO post is never easy. Given its high profile, a finance chief’s exit, whether voluntary or not, often raises questions about the future performance of the business; at a public company it may even create havoc with a stock price. “It automatically looks suspicious when a CFO resigns,” says Cynthia Jamison, a seven-time finance chief and national director of CFO services for Tatum LLC. And if a resignation occurs near a quarterly release, year-end audit, or something of a similar ilk, that definitely “leaves an impression that something is wrong.”
Little wonder, then, that many CFOs plan their exits carefully and often continue to aid their former finance teams well after their official last day. “Any time an executive leaves, he sets an example for the rest of the company, the industry, and the profession,” says Charles Krugel, a Chicago-based labor and employment lawyer. In finance, he adds, “that individual should do whatever is necessary to make the transition as smooth as possible.”
It’s All in the Timing
A judicious exit strategy acknowledges that there are good times to leave and bad times to leave. For example, leaving during a busy time in the financial calendar, says Jerry L. Mills, founder and CEO of B2B CFO, is a good way to burn bridges. He recommends delaying the exit until the close of a reporting period. In fact, he says, you should try to accept the new job offer only “on condition that you can finish your current project first. You have to be sensitive to that and not devastate your [soon-to-be] former employer.”
Mark Kent, current CFO at Bingen, Washington-based Insitu Inc., put such advice into practice. When he served as CFO of Transmeta Corp., he realized he had a different vision for the company several months before he resigned. Still, he opted to delay his resignation until the time was right, which the company decided was after the first-quarter earnings release.