There’s a lot of literature analyzing the changing profile of the CFO, but we’ve found most are likely to fit a particular stereotype based on what is “in demand” in the business world. Though there is no single definition of what makes a ‘best in class’ CFO, one thing is clear - expectations of CFOs will continue to get higher.

There has been a distinct shift in the career path of “best in class” CFOs.

The CFO of the Past: In the post-Enron, Sarbanes-Oxley era of the early 2000s, the focus was on compliance. Many companies recruited CFOs whose careers were launched in public accounting, where they earned their CPA before transitioning to industry and climbing the ranks of the accounting organization, stopping in the Controller’s role before being named CFO. This CFO was strong on technical accounting and quantitative thinking. Breadth of experience was not as critical, nor was time spent in operations. 

Today’s CFO: With the accounting and controls side of the house now in order, a new CFO profile has emerged: a strategic, operationally-oriented finance executive who can serve as the business partner to the CEO. This type of CFO, sought by many of our clients, whether public, private or private equity-backed is perhaps the broadest we have seen in recent years. Ideally, this CFO has a strong technical foundation, but is also strategic, able to work across the management team, get involved in operations, serve as a strong leader who grooms his/her successors and act as a true business partner to the CEO. This is a tall order, making for a very competitive market for finance talent.

In fact, our tracking of CFO turnover in the Fortune 1,000 shows this profile to have been even more in demand during the recession as companies looked for solid business people to lead them through a period of economic uncertainty. Based on our analysis of this F1,000 CFO population, at the tail-end of 2008 and into the first half of 2009 companies increasingly promoted finance executives into the CFO role who were most recently in general management roles. From 11 per cent in the first half of 2008 the figure rose to 23 per cent in the first half of 2009. 

On the flip side, of the CFOs who moved on from their posts during this time period yet remained with their current companies, more than 70 per cent stepped into general management or chief operating officer roles. This suggests that not only do companies want well-rounded business leaders, but also that financial executive themselves hope to broaden their skills with general business experience.

As CEOs rely on the CFO to help lead the business and to provide the financial and strategic insights necessary to achieve financial and operational goals, it is not surprising that a leader with broad business exposure who has spent time in operations is desirable. In fact, we commonly see that language in CFO job descriptions today.

The CFO of the future: The McKinsey Quarterly, CFO Magazine and KPMG have suggested that the trend we see unfolding today is laying the groundwork for the CFO of the future. These sources and others say that the CFOs of the coming decade will need to be even more operationally focused and strategic. Ideally, they will have become more commercially minded through general management or non-finance experience. In part, CFO roles often encompass functional oversight of areas outside finance, such as HR, IT, procurement and others.  A CFO with a greater breadth of experience will be better equipped to lead these various groups. More importantly, this breadth leads to greater agility, enabling CFOs to respond to changing market conditions and the uncharted business world of tomorrow.