Making the Leap

There are many ways to get to the top spot in finance.

Faster than a speeding bank run, more powerful than a loan officer, able to lease tall buildings in a single bound: finance executives practically need to be superheroes to make it to the CFO’s chair these days. So goes the conventional wisdom, at least. Those who aspire to the top finance spot are expected to have substantial experience in all facets of the business, X-ray vision into the workings of the CEO’s mind, and a compelling personal presence that inspires employees and investors alike.

What’s more, the recent carnage in the financial markets may be making it harder for those who haven’t previously been CFOs to join the club. “Most candidates for the CFO role who haven’t held that post before are typically missing two types of experience: investor relations and capital markets,” explains Jeremy Rickman, a partner with Russell Reynolds Associates’ financial officer executive search practice. “In this market, it’s going to be more difficult for them to get to the top.” Specialists in those areas are also less likely to get there, says Rickman, because of the breadth of the CFO role.

Does this mean that finance executives shouldn’t apply for the position until they have gained experience in every area of the company, traveled the globe, and held a CFO job somewhere else? Not at all. As we learned through conversations with CFOs, CEOs, and executive recruiters, those with otherwise strong financial credentials can find many ways to compensate for gaps in their résumés. Not that the conventional wisdom is wrong, it just isn’t absolute. Through varying combinations of perseverance, savvy, timing, and luck, a number of recently hired CFOs have charted interesting paths to the C-suite. You can, too.

CONVENTIONAL WISDOM: You need substantial experience in accounting and controls.

No one is going to quibble with the notion of hiring a CPA as a CFO these days, thanks in large part to the lingering effects of the Sarbanes-Oxley Act. From 2003 to 2008, the percentage of Fortune 1,000 CFOs with CPAs grew from 29 percent to 39 percent, according to executive recruiting firm Spencer Stuart. The focus on this core skill seems likely to intensify as international financial reporting standards (IFRS) come to dominate U.S. financial reporting.

While being a CPA isn’t always required, some type of experience closing the books is. “Can a non-accountant cross over and become CFO? It’s possible, but I don’t see it very often,” says Marc Schonfeld, a senior executive recruiter in the New York/New Jersey area for Ajilon Finance. “Financial standards are so stringent these days that to try to bypass that [area] would be a real shortcoming for a CFO.”

Given the recent attention paid to accounting, controls, and IFRS, it’s not surprising that the list of controllers who have recently been promoted to CFO — including Greg Hayes at United Technology Corp. and Anna Brunelle at Tivo — is a long one. Some 23 percent of current Fortune 1,000 CFOs were most recently in accounting and controls, Spencer Stuart numbers show, compared with only 13 percent who were treasurers when promoted.


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