Generally, chief financial officers have an accounting or finance degree from an accredited college or university. A vast majority have a bachelor’s degree, as well as master’s degrees or even PhD in economics, business administration, finance, or accounting.
Because of the requirements of the Sarbanes-Oxley legislation in the United States, companies who publish financial reports to the Securities and Exchange Commission need the author of the report to be a certified public accountant. While many companies in the past saw that there may be a difference between the skill sets of finance and accounting, the Sarbanes-Oxley law has effectively required most chief financial officers to be CPAs as well.
Because the certified public accounting license has specific educational and work history requirements in finance and accounting, most chief financial officers have held executive positions in one of the eight major accounting areas before becoming a chief financial officer.
Job Skills
Most chief financial officer jobs require that the applicant is to have experience in one or more of the following areas: Treasury, Audit and Assurance, Internal Auditing, Billing, Tax, Finance, Credit/Collections or Payroll.
Because the chief financial officer oversees the budgets of other executive positions, as well as provides funding for executive jobs, the CFO usually has excellent knowledge of the industry as well as the company. As the key executive with responsibility for directing the financial strategy, planning and forecasting for the company, holders of chief financial officer jobs often have at least 8 to 10 years of experience in an executive position within an organization.
Other skills of the chief financial officer may include currency transactions, as well as compliance with all accounting and securities rules and regulations. For publicly traded companies, the chief financial officer also has the responsibility of complying with the Sarbanes-Oxley regulations, as well as ensuring that all reports to the Securities and Exchange Commission are filed in a timely manner.
Job Outlook
Top executive positions, such as Chief Financial Officer Positions are expected to grow at a slower rate than the economy. Between 2006 and 2016, the growth rate is expected to be 2 percent. However, the position is relatively safe from being outsourced to other countries, as these positions are critical to the function of the company. While the overall growth rate is expected to be minimal, some industries may have much faster growth. For example, industries that provide scientific, professional, or technical services are expected to grow at 11 percent, while manufacturing industry positions are expected to decline.
Finding the Perfect Position
Chief financial officer positions are highly coveted. Companies usually publish their selection in national or regional financial publications. Because the chief financial officer holds the power to select the financial strategic direction, as well as manage risks to the bottom line, company boards are generally careful in their selection process. The selection process may be intense and protracted. However, the interviewing and hiring experiences may be different by company, based on corporate culture, as well as experience within the company.
Most Chief Financial Officers have held executive jobs within the company, or have held high profile executive positions in other companies where their work has become widely known. The greater the networking opportunity the applicant has, the more likely he gets selected for the interview process.
While the finance and accounting experiences are generally portable between companies within an industry, most Chief Financial Officer Jobs go to applicants who have long career histories in a particular industry. Since one of the roles is measuring financial risks of investments within the industry, it is vital that the applicant fully understands the challenges and opportunities within the industry to be successful.
Salary Range
Salaries vary widely by industry and location within the United States. The size of the organization also influences the salary of the chief financial officer, as the greater the size of the organization, the greater the risk, and thereby the greater the reward. The average salary for a chief financial officer is slightly over $293,000 per year. Chief financial officer positions also are eligible for substantial bonuses, in excess of $125,000 per year. Chief financial officer jobs are also usually eligible for stock option grants that may be worth more than the annual salary and bonus combined for a rapidly growing company.
Conclusion
Applying for a Chief Financial Officer position, like other executive positions requires planning, networking and a long career horizon. Many successful candidates for chief financial officer began their planned career starting with their choice of undergraduate program, as well as their choice of industry and skill sets to perfect. Because the chief financial officer position is integral to the success or failure of the company, having a long record of accomplishment is essential.
