CFOS are bringing more to the table than build-to-flip skills

Brian T. Cohen, CFO

Brian T. Cohen, CFO

By Robert Israel

A trend emerging in the current recruitment and hiring of Chief Financial Officers (CFOs) is one that seeks candidates whose backgrounds accentuate traditional fiscal management experiences.

It’s not the skills gained during the boom times — when financial officers worked their way through boardrooms filled with venture capital investors — are completely out of vogue.

These days, companies are looking for a CFO with demonstrated, traditional CPA skills — and the expertise to handle the books responsibly, even while they offer corporate guidance beyond what’s sought by stock analysts.

When it comes to the bottom line, employers increasingly want to see a proven ability to present financial evidence not only in black and white, but also in shares of gray — those areas where financial risks and debts often linger unnoticed.

Such traditional skills are often in the tool belt of a CFO candidate with a solid financial and ethical reputation.

“There was a time when financial officers geared their reports with what I call ‘fancy transactions,'” says John Shaw, the CFO at Cabot Corp., in Boston. “These fancy transactions were those that got companies in trouble later on because they do not show the debt that many companies may have incurred. It allowed companies to stretch things a bit. That’s all great — that is, until things go wrong, as they did with Enron.”

Shaw, who hails from the U.K., also did a stint with Arthur Anderson at one point in his career. The move back to more conservative financial management has been afoot across all industries for the past several years.

“There is a definite sense that it is back to business,” Shaw says. “Good financial controls are needed because they work. There’s a new spirit of openness in the wake of such mammoth economic and business upheavals.”

Brian T. Cohen noted that when he went job hunting, he was looking at a corporate philosophy more aligned to his own.

“I have a lot of experience working with high technology companies and with venture capital financing,” Cohen says. “I wanted to work for a place that has an innovative product and a strong customer base. You have to understand the numbers and what’s in store, certainly, but as a CFO, you also are relied upon for integrity, to share information and to bring management, employees and investors onto the same team. you have to have that trust. You have to be able to be candid.”

Cohen adds that he is glad the trend is moving toward an increased emphasis on business ethics.

“I can’t imagine working any other way,” he notes.

Another important aspect firms are looking for when hiring CFOs is an understanding of international expertise.

Shaw notes that he has considerable international business expertise, and this is one aspect that was sought after when he was hired by Cabot.

“While the U.S. rules with regards to financial statements that apply and are accepted around the world, you have to know how each country the firm that employs you is doing business,” he says.

This does not come as a surprise to Walt Williams, a partner in the Wellesley office of New York-based Battalia Winston International, Inc.

“There has been a noticeable shift in the last several years in the kinds of candidates companies want when it comes to hiring CFOs,” Williams notes. “And the emphasis is constantly on good, early training in academy companies, which provide quality training background. There has been less emphasis on bringing new CFOs on board that have hopped around, which is one trend I noticed during the technology boom.”

Given this sea change, the new emphasis and demand for high-quality CFOs, how is it to find qualified candidates?

“I tell people that it is easy to do a CFO search, but it is difficult to find this type of person,” says Williams. “Sometimes we see that the candidate has too little experience, they might have basically been a controller and in the frenzy of the boom time got prompted into the role of a CFO. But, in truth, we are finding that they were not qualified to be a CFO.”

**
Robert Israel can be reached at risrael_97@yahoo.com. A version of this report appeared in Boston Business Journal.

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