Within the financial world, a Chief Financial Officer or CFO is the highest ranking position a professional can hold, and it is usually the third ranking position within a company or organization overall. It takes some years of experience and a firm foundation in business, finances, leadership and strategic planning to become a successful CFO.
Scott Forrester is CFO of Enjoy Life Natural Brands, LLC. He has held this position for various companies (such as Tiger Electronics, Premium Surge Promotions and Appetizers And Inc) for nearly two decades. Forrester completed both a Bachelor’s and Master’s degree in Accounting, earned CPA designation and started out working as a public accountant at Grant Thornton. In a Gaming & Leisure magazine article, Forrester stated, “Each day brings new and unique challenges, opportunities, and accomplishments. My work is often behind the scenes, ensuring that the company’s vision becomes a reality”.
Forrester added that his professional role has focused on human resources, benefits and payroll, as well as legal, insurance, IT and logistics matters. “One of my highest priorities is always paying employees on time and accurately, with correct benefits,” wrote Forrester in the G&L article. “Throughout my career, I have never missed a pay date…I remember once [calling the payroll service] from the delivery room right before my wife gave birth to our first child. The employees had to get paid!”
Do you have the same level of ambition and dedication as Scott Forrester? Find out about what CFOs do and some of the potential career paths to rise to this rank.
CFO Job Description
While delivering a presentation at Warrington College of Business Administration (when she was Chief Financial Officer of Cree, Inc.), Cindy Merrell said that, “CFOs need a 360 degree view of financial performance”. In other words they are delegators, facilitators and overseers of their entity’s entire financial workforce, managing all financial areas, from investments and banking to trade and mergers.
Merrell added that CFOs are no longer simply responsible for reporting the financial status to the CEO and Board – they are also strategic partners in helping grow their company or organization.
Some typical job duties of a chief financial officer include:
- Develop the company’s strategic plan or goals together with the CEO, Board of Directors and other executives.
- Develop and implement financial strategies and monitor their performance
- Manage all of the company’s or organizations financial departments (i.e. human resources, accounting, investments, taxes, legal, loan, budgeting, equity and debt financing, payroll, etc).
- Facilitate benefits packages to be the most cost-effective as possible.
- Help lead the company or organization through acquisitions or mergers.
- Ensure all necessary financial information is filed or reported according to regulations.
- Report the company’s or organization’s financial status to the Board of Directors and other relevant parties.
- Direct all relevant risk management procedures (such as preparing for audits, insurance coverage, forecasting, legal issues and reporting and preventing financial risks).
- Acting as a liaison between the company or organization and banks, investors and other financial entities as well as financial services that have been outsourced.
Google’s CFO, Patrick Pichette
Education: Bachelor’s Degree in Business Administration; Master’s Degree in Philosophy/Politics/Economics
Years Experience in Financial Management/Operations: 20+
Past Executive Positions: Vice President of Planning & Performance followed by CFO at Bell Canada; Vice President & CFO at Call-Net Enterprises Inc.
Board Member: Serves on Board of Directors for Amyris, Inc and Trudeau Foundation.
The Career Path
According to Job Wings Careers, a “typical” career path to eventually become Chief Financial Officer of a company or agency consists of starting as an entry-level accountant, moving up to chief accountant, accounting manager and then CFO.
Indiana University’s Kelley School of Business adds that starting as an auditor, financial analyst, investment banker, tax advisor, business system analyst or financial consultant are also ideal careers on your path to becoming CFO.
Joseph Michaels International states that standard qualifications to become a Chief Financial Officer include approximately eight to 10 years experience in managerial or senior positions and a Masters degree in Financial Management, Business Administration or Accounting. Additionally a CPA (chartered public accountant) designation is often desired by those hiring CFOs.
Not So Typical?
While these may be the “typical” or “standard” career paths to become a CFO, in reality, chief financial officers may acquire their position in a variety of ways.
Some may start out at an entry-level financial position and work their way up within the same company without completing any graduate program. Others may have more leadership experience than financial. Some may have acquired their most valuable skills through volunteer experience and working with a mentor.
A Smart Pros article entitled “The Road to CFO” (October, 2002) encourages those who set their sights on becoming a CFO to “think outside the box”: “Many of the skills and experience you need can be gained through memberships in associations, volunteer work or temporary or contract work.” The article adds that you should always strive for supervisory positions, and this may involve moving on to another company where there is more potential for advancement, even if it involves a temporary drop in status. Additionally diversifying the financial skills you acquire (not solely focusing on one area) is recommended.
GE’s CFO, Keith S. Sherin
Education: Bachelor of Arts; Master’s Degree in Business Administration
Years at GE: 31+
Years as GE’s CFO: 14+
Some previous positions at GE: Executive Audit Manager, Manager of Finance (Commercial Engines Operations), Director of Finance (GE Plastics, the Netherlands),Vice President of Finance and Financial Services Operation.
Job Outlook & Salary
According to the U.S. Bureau of Labor Statistics (BLS), the job outlook for financial managers is 9% growth between 2010 and 2020. The median salary in 2010 was $103,910/year.
According to the BLS, the job outlook for top executives is 5% growth between 2010 and 2020. The median salary in 2010 was $101,250/year.
(The BLS names CFOs in each of these categories, although does not provide salary and job outlook information specific to CFOs).
Average Salary for Corporate CFOs
According to a Business Wire press release from May 2012, for public company CFOs, the average base salary is approximately $286,500. The press release adds, “After factoring in additional cash-based, long-term incentive awards, the average total cash compensation for the public company CFO is $459,301.”