I am!
I just read an article by Kathy Jarboe at the Daily Record that stated the turnover of Maryland’s public company CFOs more than doubled in the last two years. The article cites corporate change and a slowing economy as two reasons for the increased turnover. Add to that mergers and acquisitions, which would be the third reason CFOs have to go. A fourth reason might surprise you: It is when the company grows fast and the CFO can’t keep up.
Unfortunately, this is also true in the private-company world. I have heard from more than a few of our private-company CFO members who have been displaced due to the reasons above.
Two more dangers to the CFO’s job today is the risk of earnings restatements and the pressure to meet earnings projections. Too many times, when the CFO finishes pulling all of the corporate numbers together and they aren’t what everyone expected, there can be trouble. Pressures to re-evaluate estimates and accruals and look for missing transactions can turn into overly aggressive estimates. Go a little further and they become unethical or even criminal. Often, the CFO is the person who must make those judgment calls.
Another danger is the new relationship with the CEO, the audit committee and the board of directors. That’s a new dynamic that CFOs must master in today’s post-SOX environment.
So why do they do it?
The CFO job is unique because of the mix of strategy and functional expertise, leadership and analysis. It is one of those jobs in which a CPA can really be at the top of his or her game. Recently, these roles have grown to include more operations and, in some cases, the full chief operating officer role (COO) role. We have covered some of the new dynamics of this job in prior posts.
So, any CFOs out there: Tell us why you do it and what is diffeent about today’s CFOs?
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