Spencer Stuart

CPA CFO vs. Non-CPA CFO

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The controversy is back. 

Should Chief Financial Officers be required to hold a CPA designation, or not?

It began with a guest post on the FEI blog, with a couple of nightmares, I mean examples, of companies with non-CPA CFOs at the helm, and continued on through the comment section. This has also been a hot topic in Proformative, too. 

Non-CPA CFOs say it doesn’t matter, shouldn’t matter because they can still do the job, and companies just don’t understand that fact. Companies “glorify” that piece of paper. What they fail to understand is that it’s not about them. It is about what corporate leadership has decided is right for the company. 

The other argument is that CPAs are bean counters and not strategic leaders. I couldn’t disagree more. Many more of my clients began in accounting, secured their CPA, and have gone on to holding a seat at the executive table as strategic leaders. 

Statistics from Spencer Stuart support what I see. The number of CPA CFOs has risen from 29% to 45% since 2003. Simultaneously, bean counting is out; driving strategic vision is in high demand. The two are not mutually exclusive.

Rather, I think it speaks more to the wiring of the individual. Some CPAs are numbers nerds. It’s what they love and where they feel comfortable. Their lifelong goal may be accounting. It works for them.

On the other hand, some numbers savvy folks are also quite high on the “D” (dominant) and “I” (influence) DISC scale. They have both leadership and people skills. Those CPA CFOs are both left brain and right brain thinkers and will always be high value targets. 

Since you can’t change what a company has decided they need, it’s important as a candidate to identify your target audience. Who needs what you bring to the table? It’s a much easier sale then beating your head against a wall trying to convince someone else that they need / want / should buy something different.

One final thought … the second example in the FEI blog post points to the reason why companies, as a rule, prefer to hire sitting CFOs over candidates who have never held that title.

What Employers Want from CFOs

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Executive coach Mike Smith did a great job of summarizing comments made by Spencer Stuart’s Karen Quint at a chapter meeting of FEI.

Some very key points from that presentation include this one … “Karen mentioned that the time to get ready for a new role is before the job comes up.” In other words, embrace the “I’m merely between searches mentality.” Have a career survival plan and execute it daily. Despite the fact that CFO tenure is up (partly due to the recession), the fact is that corporate loyalty is tied directly to last quarter’s numbers. 

Additional key points from the article …

–Since 2003, the number of CPA CFOs has risen from 29% to 45%.

There is a lot of chatter among finance executives around the necessity of holding the CPA designation. The reality is, if a company requires it … that is their prerogative. You can’t get around the requirement through a job board or a recruiter, but you “might” be able to get around it through a direct contact with the CEO or a Board member. 

–The national average of an external CFO hire is 40%.

That means a couple of things. First, 60% are internal hires, which is a pretty big number. And it also means that the competition is extremely stiff for the remaining 40%, which is a pretty low number. To compete for those external positions, a candidate must stand out from among all the other CFO candidates vying for those same jobs.

–Today’s Chief Financial Officer is more influential and more visible. He is able to build strong relationships throughout, across, and beyond the company and serves as a strategic business partner.

Bean counting is out … driving strategic vision is in. To accomplish that, CFOs must possess solid interpersonal, communication, and negotiation skills. "CFOs not only want people with people skills working for them, they themselves bring higher value when they bring relational skills sets to the table." (full post)

Quint also wrote an article for Business Week if you’re interested in her thoughts on “Boards and the expanding role of the CFO.”