The Path to CFO Isn’t as Clear as It Used to Be

 In the past, financial professionals could start off as an accounting clerk and work their way up to CFO if they were dedicated and hardworking. These days, corporate structure has changed and so have the qualities that recruiters and HR managers are looking for in high level financial officers. Many companies are hiring externally to fill CFO positions and passing over internal CFO candidates like senior auditors, treasurers and controllers. Why? Because many internal candidates, while they may be competent financial managers within the company, lack the business expertise and leadership skills to work closely with the CEO and other high-level executives.

When industry leaders and former CFOs who are now CEOs were asked what qualities they looked for in a CFO candidate, the list was pretty long. A background in accounting and a CPA were first and foremost on the list, of course, because a CFO needs to have the structured training of a CPA and the detailed accounting knowledge of a financial analyst. In the post-Enron business world, CFOs need to adhere to strict reporting procedures, and a thorough accounting background can make CEOs confident in a CFO’s ability to accurately report facts and figures.

The CEOs did report that experience as a high level financial officer was an important requirement for a CFO position. Candidates were preferred who did have experience as a treasurer or a controller because these positions are still considered high level financial executive positions in a company. However, this type of financial experience isn’t the only thing that CEOs are looking for in a CFO candidate.

The two other things that CEOs and recruiters are looking for in a CFO candidate above and beyond financial experience are business knowledge and proven leadership skills. Many CEOs said that they would prefer a CFO who had an MBA because it shows that they not only understand the financial aspects of running a company, but the things that drive business. As the right hand to the CEO, the CFO has to partner with executives from all branches of a company from operations to marketing, so they need to have an intimate knowledge of how these departments work.

In addition to business knowledge, the most successful CFOs have leadership skills and a proven track record of leadership within a company. CFO candidates that have experience in positions where they have developed policy, guided operations, managed teams and created business strategy have a better chance than candidates who simply excel at financial matters. To work closely with the CEO, a CFO has to be a leader as well as a financial whiz. Financial executives with their eyes on a CFO position need to develop their business and leadership skills.