The Career Path of the Modern CFO:
This interesting article on the changing role of the FD was published last week by Enterprise Innovation, a media business specialising in thought leadership for the business world. It explains how CFOs are now expected to take a more strategic role within their organisation as a partner to the CEO, spending less time on number crunching tasks.
George Heppenstall and Simon Thomas from our FD Practice comment:
“In recent years we have seen a shift in emphasis from primarily technical CFO’s who focus on the daily, weekly, monthly and annual financial management of a business to those who can clearly demonstrate a depth of commercial, strategic and operational experience which supplements the wider management team.
Clearly their financial expertise and qualifications remain important – invariably one of the main professional qualifications are requested and often in the order of ACA, CIMA and ACCA. Often in a private equity backed business, the investors who have a hand in candidate selection are themselves finance professionals and are likely to have qualified ACA earlier in their careers. This makes them more likely to gravitate towards that particular qualification.
Rarely, if ever, do we encounter situations whereby a candidate is appointed directly from a professional firm, unless that is, they are “poached” from the Advisors during a deal process.
All our mandates have a specific requirement that CFO candidates are proven in commerce and they have demonstrable track records of contributing to the overall success of a business, often being recognised as the Number 2 to the CEO.”
Supporting the above, we also generally find that sector or sub-sector experience is sought after, despite the FD role being one of the most transferrable.”
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The Career Path of the Modern CFO
…It is no longer based purely on financial skill
There has been much written about how the CFO role has changed over the past decade. They are now expected to take a more strategic role within their organization as a partner to the CEO, spending less time on number crunching tasks that can be done by subordinates or automated, and focusing instead on influencing the future direction of the company.
In light of this, CFOs are now not necessarily expected to come from the same background they once were. In a 2013 report from the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), 49% of CFOs surveyed said they started their finance careers in public accounting firms and 42% started their careers in a finance role in business. Even since then, this has changed, and we are seeing fewer and fewer coming from an accountancy background.
It has long been the ultimate goal of many in accounting to become a CFO, but it is no longer necessarily the case that the skills they have are desired. The modern CFO must be strategic, a forward-looking thinker, a leader, a communicator, a relationship-builder, and a project manager. These skills require a fundamentally different mind-set than accounting. It is clearly still important to have a solid understand of accountancy, but it is no longer their primary objective, and when recruiting CFOs it should therefore not be considered top of the list of desired qualities.
A CFO is the captain of the accounting ship, and while it is good that they know how to hoist the mainsail and scuttle the jib, they don’t need to be an expert as they don’t really have to do it.
There is still a case to be made that starting one’s career at a Big Four accountant is the best way to step onto the path to becoming a CFO, but it is no longer the only one. Ultimately, the qualities a CFO has to have depend largely on the needs of their organisation, and when recruiting one, companies will look to the CFO with the career path that most demonstrates their ability to fulfil these needs. Some may still need a pure finance expert as opposed to a generalist.
We spoke to three CFOs about how they got started in their career:
Peder Sahlin, CFO, Avalanche:
‘For me it was a career change. I went from a high school drop-out working as a mechanic to a CPA with both a Bachelors and Master’s degree in 7 years starting in my early 30’s. Since then I have worked primarily in highly entrepreneurial companies and for the most part directly with the principals and senior management. So far I have been in specialty chemicals, agriculture (flowers), pharmaceuticals, audio-visual (sales, distribution, installations, and government sales), construction, defense industry sales, and now online dating.
My career path is a bit different. I dropped into a position right out of school, working directly with the founder of the third largest printing ink manufacturer in the US.’
Jan Gooze-Zijl, Chief Financial and Operations Officer, UKTV:
‘I didn’t qualify in finance. I actually started working in banking in France and the Czech Republic, and then moved into a strategy team of a consumer goods business in the UK. Over the years, I then took on a number of organisational jobs, a number of operational development roles, before getting my first full finance job in 2009 as finance director for the Virgin Media TV channels, as it was then.’
Matthew Hann, Head of Finance, Channel 4:
‘I left school at 16 to go and play professional football for Peterborough United. I had five years as a professional footballer before not quite making the grade. I went back to university in my early twenties where I took a business studies course that was quite broad in its nature. I particularly enjoyed economics and strategy and the finance elements, I liked how tangible they were, very evidence and fact based, and I went from there.’
