Wanted: Strategic CFOs. Again.

For a position as important as CFO, the requirements of the job seem to change with astounding frequency, driven by the macro trends of the moment.

In the first years after Sarbanes-Oxley took effect, many companies wanted finance chiefs with technical accounting skills and backgrounds as controllers. When the credit crisis set in, CFOs with capital-raising skills were suddenly in demand. Now, with hope emerging that an economic recovery is on the way, having the strategic bent to identify and exploit opportunities is coming to the fore. The revolving job description is one of the reasons CFO turnover is so high, although the churn rate has moderated somewhat during the economic downturn.

Those topics, as well as what finance executives should do to enhance their job-search prospects, were up for discussion by a panel of executive recruiters at last week's CFO Rising West conference in Las Vegas. Panelists E. Peter McLean, Michele Heid, and Christopher Langhoff lead the financial officers practices at Korn/Ferry International, Heidrick & Struggles, and Russell Reynolds, respectively. An edited version of their question-and-answer session with Lori Calabro, editorial director of CFO Conferences, follows.

Has the supply and demand for finance professionals changed in the past year as a result of the recession?
McLean: Our business is down 40% in the past year. It's created a flood of available talent. And for clients who are recruiting, the searches are taking longer because they feel there's an opportunity to look at a wider range of people; they're not settling for the candidates presented on the first slate.

Langhoff: Turnover is obviously down and our business is off, but a lot of it is at the lower levels — controller, treasurer, investor relations, and financial planning and analysis. On the CFO front, I think turnover is still high. If any of your departments had turnover of 12% or 15%, you'd probably say that's too high.

So CFOs are staying in their positions longer?
Heid: They are more inclined to stay with the devil they know than go with the devil they don't know. In the Fortune 1,000, there was 18% turnover in both 2007 and 2008, and this year it looks like it's going to be more like 14%. That's a significant decline. One big factor is that disrupting and moving your family, at a time when the economy is volatile and the housing market is seriously suffering, is a tough pill to swallow right now.

A year ago, capital-raising experience was at a premium because of the liquidity crisis. What skills are in demand now?
McLean: There's been a quick sunset on the need for capital-markets expertise. We're back to a focus on strategic and operational CFOs, real business people who have proven they are effective at driving value.

Langhoff: Capital-markets experience is more important than it used to be, perhaps, but what a lot of companies are looking for is the ability to communicate and interact with all the economic stakeholders — the board of directors and investor relations, as well as with Wall Street and the credit-rating agencies. The ability to own those relationships and represent the company well gives CEOs a sense of comfort that they need right now.

Heid: In the private-equity sector, we've seen some people with treasury experience who were brought in to do an IPO that is now delayed. The portfolio companies are switching their focus to operations, finance, restructuring, cost-cutting, and profit improvement. Raising funds is not as prevalent, except for companies that are highly levered and need to recapitalize.

We've heard in the past that companies want Superman or Superwoman to be CFO. Are they reordering priorities now, or is the laundry list still really long?
Langhoff: In years past, if clients had 10 things on their checklist, they might settle for 8. But now they want all 10, and are willing to take their time and see as many people as they need to in order to get all 10.

Heid: The amount of due diligence by both companies and candidates is pretty extensive in today's environment. A company cannot take the risk that the CFO they hired is going to show up with a Wells Notice from a former company. And rarely do we have a CFO candidate who does not insist on meeting with the chair of the audit committee and the external auditors.

Langhoff: There's no substitute for spending time with the CEO, your potential future partner. Go to dinner with him and see him in different environments. It should be the closest relationship you have outside of your immediate family. Letting someone hire you after a 45-minute interview is a real mistake.

Heid: We call it the airport test. If you got stranded in the airport for 12 hours, would you want to be with this person?

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• Heidrick & Struggles |
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