Over the years, I’ve had many discussions with public-company CFOs that went something like this:
Me: So tell me about your background.
The CFO: I came up through investment banking (or business development, or FP&A, or treasury — anything but accounting).
Me: No accounting?
The CFO: No. I understand accounting, but I don’t have a degree and never really had any formal training.
Me: How do you feel about signing off on the accuracy of your financials, at some professional and personal risk to yourself?
The CFO: I have no problem with that. I have a super-great controller and accounting staff.
As a recruiter of finance executives told me last year, “When a person in that position says they’ll depend on somebody else to handle that, it scares me.”
On the other hand, what is a modern finance chief to do? For the most part, his or her employer wants someone in the role who’s a strategic, forward-looking thinker and a business partner to the CEO. That requires a fundamentally different mindset than does achieving the technical precision that’s necessary for sound accounting. Besides, even a CFO must go home to sleep at some point.
While somewhat fewer people may be moving through the accounting ranks on their way to a CFO chair these days, the debate over the relative importance of an accounting background to handling the job effectively is as lively as ever.
In this package of articles, one contributor takes a passionate stand that an accounting background is absolutely necessary and the core of the job. Another acknowledges that strategic skills are a priority, but not at the expense of accounting wherewithal. Two different recruiting professionals beg to differ, suggesting that a world in which a strategic orientation defines the job is a world changed for the better.
And one observer, rather than taking sides, describes a cyclical profession in which technical and strategic abilities take turns seizing the upper hand, as dictated by events and trends that influence the business climate from one era to another.