Good morning. This year, I’ve continued to delve into the evolving role of the CFO, which seems to become more dynamic by the day.
The debate over whether it’s more valuable to have a CPA or an MBA when aiming for a CFO position continues. Meanwhile, there is a high demand for CFOs who have finance or even investment banking backgrounds, coupled with experience in operations, leadership, and strategy. But that doesn’t mean companies aren't seeking "reporting CFOs."
That was the topic of a conversation I had this week with Shawn Cole, president and founding partner of executive search firm Cowen Partners. The term reporting CFOs refers to the traditional remit of finance chiefs, which is taking care of financial reporting and compliance within the company. These leaders have backgrounds in accounting and auditing, hold a CPA, or perhaps previously worked at a big accounting firm, for example, Cole said.
“Reporting CFOs are still in high demand right now,” he said. Depending on a company’s needs, some CEOs and boards may be focused on bringing financial stability to the firm or they may want to scale up quickly, he said.
But there’s no denying that broader business knowledge and operational experience is a requirement to become a "modern CFO" who is central to company strategy. However, those who also have accounting backgrounds could have the upper hand.
“The best CFO profile is the reporting CFO who became an operating CFO,” Cole said. For example, they have an accounting foundation, but acquired operational experience having helped run departments like IT, and have led M&A, he said.
I recently talked with Khozema Shipchandler, who became the CEO of the software company Twilio in January. He moved from CFO to chief operating officer to president to chief executive at the company in less than six years.
When he began as CFO, Shipchandler was intentional about getting operational experience. “I talked to my predecessor about it at the time and said, ‘There’s a lot more that I can do here besides just accounting and financial planning,’” he recalled.
For Cole’s clients who seek CFOs with operational experience over accounting experience, he reminds them of a critical factor—ensuring they have a great chief accounting officer (CAO) or controller in place or hire one.
The various accounting scandals we’ve seen this year also underscore the high value of an exceptional CAO or controller.
Sheryl Estrada
sheryl.estrada@fortune.com
The following sections of CFO Daily were curated by Greg McKenna.
