ICAO Report CA to CFO

7/29/2019 ICAO Report CA to CFO

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MovingFromCAtoCFO:ACompetencyFrameworkAnICAO/QueensUniversityCollaborativeStudyProducedby: P.MurphywithT.Anger,A.Barrett,Y.Chan,Y.Luo,Y.Rahrovani,J.

Roger,andJ.Wylie.


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Contents

I. ExecutiveSummary......................................................................................................................................... 1

II. Introduction.................................................................................................................................................... 2

III. CompetencyFrameworkfromPriorLiterature.............................................................................................. 2

KeyDriversofChangeinCFORole..................................................................................................................... 2

MovetoaKnowledgeEconomy..................................................................................................................... 2

IncreasedRisk

.................................................................................................................................................

3

MoreStringentRegulatoryEnvironment....................................................................................................... 3

IncreasedCompetition.................................................................................................................................... 3

TheImportanceofValueCreation...................................................................................................................... 4

TheCFORoleACompetencyFramework........................................................................................................ 5

CFOCompetencyDeficiencies............................................................................................................................ 9

IV. TheSurvey....................................................................................................................................................... 9

DevelopingCFOCompetencies........................................................................................................................... 9

ResultsofCompetencySurveyofExecutives................................................................................................... 10

RespondentDemographics........................................................................................................................... 10

RolesOverview................................................................................................................................................. 11

StewardRole

.....................................................................................................................................................

12

ImportanceofEachStewardCompetency................................................................................................... 12

DevelopingEachStewardCompetency........................................................................................................ 13

OperatorRole.................................................................................................................................................... 14

ImportanceofEachOperatorCompetency.................................................................................................. 14

DevelopingEachOperatorCompetency....................................................................................................... 15

CatalystRole..................................................................................................................................................... 17

ImportanceofEachCatalystCompetency.................................................................................................... 17

DevelopingEachCatalystCompetency........................................................................................................ 17

StrategistRole................................................................................................................................................... 19


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Implications................................................................................................................................................... 24

GeneralQuestions............................................................................................................................................ 25

TheFutureCFO............................................................................................................................................. 25

Role

Differences:

CEO

and

CFO

.....................................................................................................................

26

CFOQualifications......................................................................................................................................... 26

SummaryandImplicationsfromGeneralQuestions27

Summary....................................................................................................................................................... 27

Implications................................................................................................................................................... 28

FutureQuestions.............................................................................................................................................. 28

V.

CompetencyMap

..........................................................................................................................................

29

VI. Bibliography.................................................................................................................................................. 30

Appendix1:TheSurvey..32

Appendix2:TheCompetencyMap.54


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I. ExecutiveSummaryThisreportidentifiesandexaminesthenecessarycompetenciesrequiredforanewCharteredAccountant(CA)

todevelopoveracareer,culminatinginbecomingaChiefFinancialOfficer(CFO). Secondarily,thereport

identifies

the

roles

required

for

a

Chief

Executive

Officer

(CEO).

We

first

examine

prior

literature

on

CFO

competencies,thendevelopandadministerasurveytoOntarioCsuiteexecutives. Duetothe

proportionatelyfewrespondentsfrompubliclyheldorganizations,wesuggesttheCFOCompetencyMap

(Appendix2)appliestotheCFOpositioningeneral.

Overallfindingsinclude:

PriorliteraturesuggestsaCFOhasfourrolesSteward,Operator,Catalyst,andStrategisteachof

whichhasrequiredcompetencies. Surveyrespondentsagreetheserolescapturetheessenceofthe

CFOsjob.

ThoughallfourCFOrolesaredeemedimportant,theStewardroleismostimportant. Themostimportantcompetenciestendtobethesoftskillssuchaspersonalintegrityandethics,

criticalthinking,communicationandpresentationskills,strategicthinkinganddecisionmaking,and

leadership. Thesecompetencies,fallingwithintheCatalystandStrategistroles,areevenmore

importantforaCEOthanforaCFO.

Overall,respondentsfoundexperiencetobethebestwaytodevelopcompetencies. However,

educationandmentorshiparealsoimportant.

Thevast

majority

of

competencies

should

be

developed

early

and

continue

to

develop

through

the

middleofonescareer. Whilenotascommon,latedevelopmentisalsoacceptable.

RespondentsidentifyfutureissueswithineveryCFOrole,theStrategistrolebeingpredominant.

ThepositionofCEOissimilartothatoftheCFO,butthereisamuchgreaterweightontheroleof

Strategist.

ActionsthatCAscantakebasedonourfindings:

UsetheCompetencyMap(Appendix2)tohelpdevelopcompetenciesthroughoutacareerwiththegoalof

becomingaCFO.

PayparticularattentiontoseveralofthesoftcompetencieswithintheCatalystandStrategistroles. BothCAsandfutureCAsshouldvolunteerthroughouttheirlifetimetodevelopsoftcompetencies.

Seekoutindustryandinternationalexperienceaswellasexperiencewithinnonfinancefunctions.

ActionsthatICAOandQueenscantakebasedonourfindings:

Considerprovidingadditionalorextendededucationalprograms,including:o Fraudprevention,detection,andinvestigationo Corporatefinance,treasuryandinvestmentmanagemento Organizationalandadministrativeskillso Communication/presentationskillsandexecutivepresenceo Corporategovernanceo Ethicaldecisionmaking


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II. IntroductionTheInstituteofCharteredAccountantofOntario(ICAO)andTheMoniesonCentreatQueensUniversity

collaboratedonaprojectintendedtoassistnewCAstoplantheircareertowardbecomingaCFOofapublicly

held

company.

The

purpose

of

this

report

is

to

provide

an

understanding

of

the

CFO

role

and

to

identify

the

competenciesCAsneedtodevelopsothattheyareabletoprogresstotheCFOlevelandfunctioneffectively.

Toaccomplishthis,avarietyofinformationsourceswereconsulted,includingacademicjournals,consulting

reports,books,magazines,andconferenceandworkshopofferings. Theinformationfromthesesourceswas

synthesizedintoalistofcompetenciesthattodayspubliccompaniesexpecttheirCFOstopossess. These

competenciesarestructuredaroundfourdifferentrolesplayedbytheCFO:Steward,Operator,Catalyst,and

Strategist. Eachoftheserolesandtheirsubsequentcompetencieswereusedtostructureasurvey

administeredtoCsuiteexecutiveswithinOntariocompanies. Followingasummaryoftheliterature,this

reportprovides

adetailed

discussion

of

the

results

of

the

survey,

including

summaries

and

implications,

and

concludeswithaCompetencyMapthatCAscanuseinplanningtheircareer.

III. CompetencyFrameworkfromPriorLiteratureOverthelast20years,thebusinessenvironmenthasbecomeincreasinglydynamic,requiringflexibilityand

innovation.

Specific

to

finance,

new

and

different

types

of

capital,

including

financial,

physical,

human,

social

andintellectual,arebeingaffectedinprofoundwaysbythechangingbusinessenvironment,resultinginthe

creationofnewmarketsandnewthreats. Theconsequenceisaneedforthefinancefunctiontouse

technologytosupplymoreaccurateinformationatafasterrateandreducecoststhroughprocessefficiencies.

This,combinedwithincreasingamountsofdisclosedinformation,technologicaladvancesandturbulent

markets,havenecessitatedashiftintheCFOrolefromthatofbeancounter,orfinancialforecaster,tothat

ofstrategistwhoisabletotransformandintegratethefinancefunctionintoaflexibleandresponsivepartner

thatproducesbusinessvalue. ThesechangesnecessitatetheCFOtofocusmoreandmoreonsoftskillssuch

asrelationship

and

team

building.

Below

are

some

of

the

key

drivers

of

the

CFO

role

shift.

KeyDriversofChangeinCFORoleMovetoaKnowledgeEconomy

Theriseofglobalizationandtechnologicaladvancementshasfacilitatedthedevelopmentoftheknowledge

economywherehumancapitalhasreplacedproductsasthekeyresourcethatdeterminesbusinesssuccess.

Assuch,

balance

sheets

have

an

increasing

proportion

of

intangible

versus

tangible

assets.

Therefore,

businessesmustincreasetheirabilitytoeffectivelymanageandreportonintangibleassets. Aswell,they

mustbeabletoattractthemosttalentedemployeeswhoseknowledgewilldrivethebusinessandultimately

determinesuccess.


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Table1

IncreasedRisk

A2008

study

by

IBM

in

which

over

1,200

CFOs

and

senior

finance

executives

were

interviewed,

determined

thatthemajority(62%)oflargeenterprises(revenuesoverUS$5billion)andalmosthalf(46%)ofsmaller

enterprises(revenuesunderUS$5billion)encounteredmaterialriskeventsduringthelastthreeyears. Of

those,42%and39%oflargeandsmall

enterprises,respectively,werenot

wellpreparedtodealwith

therisks. Ascanbeseen

fromthe

graph

(Figure

1),

organizationalculturewas

themainobstacleto

integratingdataforrisk

management. Otherissuesrelatedtoeffective

riskmanagementinclude

highqualitydata,enabling

technology,

standardizationof

processes,organization,

access/processcontrols

andcapital/budget

considerations. Allofthesemustbeaddressedbythefinancefunctiontoeffectivelydealwithrisk.

MoreStringent

Regulatory

Environment

Itisnosecretthatcertainincidencesofcorporatemisconducthaveresultedinamorecomplicatedandrigid

regulatoryenvironment. Thistranslatesintozerotoleranceforerrorandunnecessaryrisk,whichleadstothe

needtosafeguardtheintegrityofdataandfinancialstatements.

IncreasedCompetitionIntense

competition

means

that

businesses

must

reduce

costs

and

increase

efficiency

ifthey

want

to

stay

competitive. This,inturn,demandsthatthefinancefunctionsuppliesbetterinformationatafasterrateand

designsprocessestosupportit. Butefficiencyisnottheonlynecessitytomaintaincompetitiveness.

Businessesmustalsocontinuallymovetowardsmorevaluefortheirmoney,whichmeansdeveloping

strategiesandmakingdecisionsaccordingly. However,itisoftendifficultforbusinessestofindthetimetodo

so Possible solutions to this problem include leveraging technology and offshoring routine activities As


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TheImportanceofValueCreationThedriversofbusinessenvironmentchangesdescribedabovehavecontributedtoasituationinwhichvalue

creationmustbeapriorityforeveryfinancedepartmentinterestedineffectiveandefficientfunctioning.

Indeed,over80%ofparticipantspolledinIBMs2008CFOstudystatedthatmeasuringandmonitoring

businessperformancewasmoreimportantthananyotherareaofresponsibility. Thatsaid,Deloitte

Consultingfoundthatmanyfinanceorganizationsareillequippedtofostervalueaddingactivities. Only

about50%ofthe636executivesin73countriespolledbyDeloittein2007believedtheirfinanceorganization

iscompetentlyaligningfinancewiththebusinessandeffectivelystimulatingtheorganizationtoachieve

strategicandfinancialgoals.

Withoneofthemaingoalsofthefinancefunctionbeingthecreationofvalue,therearesomekeyactivitiesin

whichCFOs

need

to

engage

(Propeo,

2008):

Integratingthefinance

functionwiththerestof

theorganization. This

entailsaligningpriorities

withoverallbusiness

strategyand

putting

in

placelongtermcost

managementprograms

thatreplacetraditional

"costaccounting"activities.

Asthegraphtotheright

demonstrates,integration

isakeyaspirationformany

companies.

Participatingasanequalbusinesspartnerwithintheorganizationaspartoftheoverallintegration.

Providinginformationcriticaltothedecisionmakingprocess. Thisconsistsofdevelopingprocesses

andsystemsthatcandeliverhighqualityinformationinatimelyfashion.

Providingtimelyandcosteffectivemanagementreporting,whichincludesdevelopingmanagement

controlmethodsandproducingnewsetsofstrategicmeasuresthatmanagerscanusetoanticipate

challengesandmonitorprogress.

Ensuringdelivery

of

high

quality

services

by

strategically

thinking

through

how

the

business

should

bestapplyitscapitalresources.

Developinganeffectivebalancebetweencompliance,controlandefficiency. Amajorpriorityisthe

orchestrationoftheoverallenterpriseriskprofilewhichincludestheconvergenceofperformanceand

riskmanagement.

Table2


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TheCFORoleACompetencyFrameworkLookingattheactivitiesdescribedintheprevioussection,itbecomesapparentthatthereisashiftintheCFO

functionfromoneinvolvingaconcentrationoncomplianceandreporting,toonethatfocusesonperformance

improvement,knowledge

management

and

strategic

development.

Though

compliance

remains

essential,

the

CFOmustalsoengageandcollaboratewiththeentireorganization. Thisshiftultimatelyresultsinamore

sophisticatedfunctionthatinvolvesanincreasedinvolvementwithawidernumberofinternalstakeholders,

includingnotonlypeersindifferentdepartments,butalsoawidernumberofexternalstakeholdersincluding

shareholders,governmentregulatoryagencies,activistscallingforreform,themedia,thejobmarket,and

financialanalysts. Interactingwithawidernumberofstakeholdersinaneverchangingbusinessenvironment

requiresahighdegreeofflexibilityandadaptabilityindealingwithbothpeopleandtechnologyandanability

to

effectively

manage

a

large

variety

of

disparate

relationships.

ThecompetencyframeworkinTable3isbasedontheliteraturediscussedabove. Theframeworkis

structuredaroundfourkeyrolesthattheCFOplays:Steward,Operator,CatalystandStrategist(Deloitte,

2007). Withineachoftheserolesthereareanumberofspecificcompetenciesnecessaryforeffective

functioning. Table3listsanddescribeseachroleandcompetency. Thisframeworkisthebasisforthesurvey

ofexecutives.


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8

Strategicriskmanagement Understandingthebigpicture:suchashowtheenvironmentcan impacttheorganizationbothpositivelyandnegatively.. Anunderstandingofhowexternalandinternalfactorscaninteracttocreateorreducerisk.

.

Strategicthinkinganddecisionmaking Ability totakeaholisticandfutureoriented perspectiveoftheorganizationthatrecognizesthesynergiesandinterdependenciesbetweenthedifferentparts. Thisperspectiveisleveragedintheuseofinformationtocreatestrategiesthatenablegrowth. Thisabilityuses

innovation,creativity,andthinkingoutsidethebox.

Performancemanagement

integration


integration

is

aholistic

approach

that

spans

all

of

the

processes

and

technologies

related

to

performance

management andconsistsofthe Abilitytointegratereportingandperformancemeasurements.budgetingplanningandforecasting,and

organizationalalignment. Thisincludestheeliminationorreductionofnonvalueaddedactivities,measuringfinancialperformance,

establishingefficiencymetrics,measuringnonfinancialperformanceandmeasuringcustomersatisfaction.

Criticalthinking Theabilitytomakedecisionsbasedonsoundlogicandevidence. Thisconsists ofbeingabletodistinguish betweenfactandopinion,askquestions,makedetailedobservations,anduncoverassumptions. Theabilitytodraw soundconclusionsbasedonrelevantinformation.

Managingambiguity Theabilitytodealeffectivelywithuncertainsituations. Theabilitytocontrolonesanxiety andtomaintain clarityofthought inordertoevaluateacomplexsituation andrespondeffectively.

Dedicationto

continuous

improvement

Havingastrong

desire

to

learn; being

self

motivated

to

take

advantage

of

opportunities to

learn

new

things

and

to

be

dedicated

to

self

improvement.

Advocate/ambassadorfortheorganization Asthesecondincommand,theCFOmustrepresenttheorganizationtotheoutsideworld. Thisincludesnetworkingwithshareholders,analysts,suppliers,customers,andthepublicatlarge. TheCFOmusthaveakeensenseofwhenandhowtobestportraybothpositive

andnegativeinformationabouttheorganization.


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CFOCompetencyDeficienciesThecurrentliteraturesuggeststhatmostCAs,controllersandevencurrentCFOslackthesoftercompetencies

withintheCatalystandStrategistroles(seetheresultsfromtheDeloitte2007studyinTable4). Militelloand

Schwalbergconducted

in

depth

interviews

with

more

than

30

high

level

finance,

human

resources

and

businesslineprofessionalsandfoundthatmostCFOsrecognizeanacceptablecompetenceinStewardand

Operatorcompetencies,butatthesame

timemanyalsorecognizeaneedforfurther

developmentintheCatalystandStrategist

competencies(MilitelloandSchwalberg,

2002). Thisconclusionwasfurther

supportedin

an

analysis

by

Eldridge

and

Brousseau(2002)usingKorn/Ferry's

databaseofmorethan500,000profilesof

businessexecutivesworldwide. Ingeneral

theirfindingssuggestthatbestinclass

CFOstendtofocusmoreonpeopleissues

thanontraditionalfinancialgovernanceresponsibilities. Aswell,theytendmoreoftentousetheir

interpersonalrelationshipswithotherstomakemoresounddecisions. Anotherkeyfindingwasthatthemost

successfulCFOsuseaspecificleadershipstylethatdifferssubstantiallyfromcontrollers. BestinclassCFOstendtouseaparticipativestyleofleadershipthatishighlyinteractive,social,andconsensusoriented,while

controllerstendtouseamoreintellectualleadershipstylethatischaracterizedasamethodical/analytical

approachthatfocusesonqualityandaccuracy.

IV. TheSurveyThesurvey(seeAppendix1)beginswithadescriptionofeachofthefourCFOrolesandaskswhetherthese

rolescapturetheessenceoftheCFOsjob. RespondentsareaskedtheimportancelevelofeachroleforaCFO

andCEO,andthelengthoftimetheCFOspendsoneachoftheroles. Next,thesurveygoesintomoredepth,

describingcompetencieswithineachroleandaskingimportancequestionsofeach. Thesurveyendswith

questionsaboutCFOqualificationsandrespondentdemographics.

DevelopingCFOCompetenciesWithineachofthefourCFOroles,thesurveyasksnotonlytheimportanceofeachcompetency,buthowand

wheneachisdeveloped. ThereareanumberofmethodsthroughwhichCAscandevelopthenecessary

competenciestobecomeeffectiveCFOs. Suchmethodsinclude:

Table4


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10

20

3040

50

60

NumberofRespondents

Respondents'JobTitles

3) Withthehelpofamentor Developingarelationshipwitharolemodelormentorwho

resonatesthequalitiesyouseektodevelop,or,usinganexecutivecoachtodevelopnecessary

competencies.

OtheractivitiesthatwillsupportthedevelopmentofnecessaryCFOcompetenciesthatcanbedeveloped

throughone

or

all

of

the

above

methods

include:

Developingaleadershipstylethatismoreopen,collaborativeandparticipativeratherthan

intellectual,directiveorcommandandcontrol

Learningtolearnfromothers:becomelessdependentontechnicalexpertiseandlearntoleveragethe

strengthsofotheremployees

Increasingonessituationalawarenessbyactivelyseekingoutsituationsthatenablecollaborative

problemsolving

Shiftingonesfocusfromtechnicalissuestorelationshipandteambuilding

Improvingcreativethinking: attempttothinkoutsidethebox,pushcomfortlimits,andquestionbasic

assumptionsandthinkingpatterns

Becomingselfaware:identifystrengthsandweaknessesanddevelopincreasedinterpersonal

awarenessandresponsiveness

Interms

of

timing,

we

ask

respondents

to

indicate

approximately

when

during

ones

career

aCA

should

concentrateondevelopingthatparticularcompetency: early,middle,orlate.

ResultsofCompetencySurveyofExecutivesRespondentDemographics

Intotal,

147

individuals

responded

to

aportion

of

the

survey;

90

fully

completed

it.

The

most

important

demographicsasitrelatestoCFOcompetencieswithinapubliclyheldorganizationareasfollows:

0

20

40

6080

Public Private Unknown

OrganizationType


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0

1

2

3

4

5

Steward Operator Catalyst Strategist

ImportanceofEachRoleandTime

SpentonEach

ImportancetoCFO

TimeSpent

by

CFO

ImportancetoCEO

responsesbetweenthoseemployedbypublicvs.privateorganizations. Therefore,wesuggestthe

CompetencyMapapplytotheCFOroleingeneral.

Ofthe90respondentsprovidingdemographicinformation:

Almost40%areage4150,38%are5160,13%are60+,10%are3140

88%aremale 54%havebeenintheircurrentjob05years,27%for610years,19%morethan11years

Theyhaveanaverageof25yearsofexperience

24%areinotherindustry;23%inmanufacturing;17%infinance,insurance,andrealestate;the

remainingareinwholesaleorretailtrade,services,transportation,andpublicadministration

40%oforganizationshaveassetsof$10100million,20%havelessthan$10million,14%have$100500million,and11%have$110billion. Salessizesarecomparable

RolesOverviewThemajorityofrespondents(86%)agreedthatthefourrolescapturetheessenceoftheCFOsjob. With

respecttotheimportanceofeachrole,thefollowingareaverageresponses:

Importancescale:

1=unimportant

2=somewhatunimportant

3=moderatelyimportant

4=important

5=critical

Timescale:

1=leastamountoftime

5=mostamountoftime

AlltherolesareimportantfortheCFO,withStewardrankingmostimportantandwiththehighestlevelof

consensus. Timespentoneachroleissimilar,buthashigherstandarddeviationlevelsthananyofthe

importancemeasures,

indicating

that

respondents

differed

more

in

how

much

time

they

spend

on

each

role

thaninhowimportanttheybelievetheroletobe. Thedifferencesbetweenimportanceandtimespenton

eachroleareallsignificant,withnoparticulardifferencestandingoutfromanother. FortheCEO,themost

importantrolesareStrategistandCatalyst,andtheyaresignificantlyhigherthanforaCFO. Theroleof

StrategistisnotonlyrankedhighestfortheCEO,butitalsohasthehighestlevelofconsensus.


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3.5

4

4.5

5 Importance

of

Each

Competency

I t S l

o ThecapabilitiesoftheCEOandotherexecutives.

o Theparticularneedsatagiventime. OnerespondentsuggestedaTBDcategorydepending

uponimmediateneeds.

Severalrespondentslistedadditionalitemsthatarecapturedascompetencies,suchasadvocate,

leader,teambuilder,communicator,analyst,mentor,businesspartnerwiththoseresponsiblefor

operations,investor

relations,

and

governance.

The

Competency

Map

in

Appendix

2has

been

updated

and/orexpandedtoincludethesecompetencies.

OnerespondentindicatedthataroleofmaximizingcapitalemployedisimportantforCFOsofprivately

heldorganizations.

OnerespondentdefinedtheroleofCFOas,theinternalconscienceoftheseniormanagementteam,nottosuggestthatnonCAsdonthaveaconscience,buttoindicatethataCAhasreceivedtraining

thatincludesaspecificcodeofethics.

StewardRoleFollowingisthelistofcompetenciesundertheStewardrole:

1. Workingknowledgeofriskmanagement,budgetandforecastingtools(Risk&Budget)

2. Investmentandcreditriskknowledge(Invst&CreditRisk)3. Accountingknowledge(GAAPandtaxation)(Acctg)4.

Externalfinancialandregulatoryreportingknowledge(FinRptg)

5. Understandingoffinancialinformationsystemsandinformationalneedsofdecisionmakers(InfoSystems&Needs)

6. Understandingofsystems,processesandinternalcontrolsoverfinancialinformation(Systems&IC)

7. Understandingthebusinessenvironment(BusEnv)8. Fraudprevention,detection,andinvestigation(Fraud)

Importanceof

Each

Steward

Competency

Asthegraphbelowshows,knowledgeofthebusinessenvironmentreceivesthehighestlevelofimportance.

Thiscompetencyalsohasthegreatestconsensus. Thecompetencyoffraudprevention,detectionand

investigationreceivesthelowestlevelofimportanceandleastconsensus,butstillranksasmorethan

moderatelyimportant.


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0

2040

60

80

100

120

NumberofRespondents

HowDoes

One

Develop

Each

Competency?

FormalEduc

Experience

Mentor

DevelopingEachStewardCompetency

IndevelopingtheStewardcompetenciesoverall,63%ofrespondentsreportedexperienceasthebestmethod,

54%reportededucation,and29%reportedusingmentors.1 Thechartbelowreportsthenumberof

respondentschoosinganyorall

threemethods

of

developing

eachoftheSteward

competencies.

TheFormalEduccategoryis

listedinthesurveyasFormal

educationprogram/seminar.

Foropenendedquestionsabouthowrespondentsbuilteachoftheirowncompetencies,respondentsreport

thefollowing:

ResponseCategory: Description: Number:

Experience

Experience,industry

experience,

audit

experience

387

Education Education,university,CAtraining,Canadiansecurities

courses,industryseminars,seminarsfromriskmanagement

orinsurancecompanies

340

Onown Usingobservation(6,includingaskingquestionsand

listeningcarefully),computertools(1),orselfstudy(91)

98

Workingwithothers Networkingandteamwork 70

Mentor

Mentor

60

Discussions Discussionswithauditors(20),consultants(8),customers

(3),lawyers(6),andvendors(13,includinginternalITstaff)

50

Total 1,0052


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0

20

40

60

80

100

120

Numb

erofRespondents

WhenDoesOneDevelopEach

Competency?

Early

Middle

Late

Overall,about61%ofrespondentsbelievedStewardcompetenciesshouldbedevelopedearlyinacareer,50%

saidmiddle,and12%saidlateinacareer.3 RespondentsreportthefollowingStewardcompetenciesin

particularshouldbedeveloped

early:

Accountingknowledge

Understandingof

systems,processesand

internalcontrolsover

financialinformation

Workingknowledgeofriskmanagement,budget

andforecastingtools

Competenciessuchasfinancial

reporting,fraudprevention

/detection/investigation,and

informationsystems/information

needsappeartorequire

attentionboth

early

and

in

the

middle

of

ones

career.

Knowledge

of

investment

and

credit

risks

as

well

as

knowledgeofthebusinessenvironmentarebestdevelopedinthemiddleofonescareer.

OperatorRoleFollowingisthelistofcompetenciesundertheOperatorrole:

1. Staffplanning

(Staff)

2. Projectmanagement(Proj)

3. Staffmanagement,empowerment,teambuilding,andaccountability(Mng)

4. Corporatefinance(Corp)

5. Treasuryandinvestmentmanagement(Treas)

6. Mergersandacquisition,strategicalliances(M&A)

7. Outsourcing(Outs)

8. Achievement/resultsorientation

(Results)

9. Organizationalandadministrativeskills(Admin)

ImportanceofEachOperatorCompetency

Asthechartbelowreports,respondentsrankedallOperatorcompetenciesasatleastmoderatelyimportant.


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DevelopingEachOperatorCompetency

Asreported

by

73%

of

respondents,

experience

is

the

best

method

for

developing

competencies

within

the

Operatorrole. Fallingmuchloweriseducation(39%)andengagingamentor(35%ofrespondents). Itappears

thatonlycorporatefinance,treasuryandinvestmentmanagementarebestdevelopedprimarilythroughsome

kindofformaleducation. Seethechartbelow.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Staff Proj Mng Corp Treasury M&A Outs Results Admin

ImportanceofEachCompetency

Importance:

1=unimportant

2=somewhat

unimportant

3=moderately

important

4=important

5=critical

10

20

30

40

50

60

70

80

90

Numberof

Respondents

HowDoesOneDevelopEachCompetency?

FormalEduc

Experience

Mentor


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0

10

20

30

40

50

60

70

80

90

NumberofRespondents


Competency?

Early

Middle

Late

Resultsoftheopenendedquestionaskinghowrespondentsdevelopedtheirowncompetenciesare

summarizedasfollows:


Experience Experience,auditexperience,runningownbusiness 382

Education

Education,university,

extra

curricular

activities

at

school,

CAtraining,internaltraining,corporatepractices,DDI

seminars,CBVprogram,CFcourse

138

Onown Usingobservation(14,includinglearningfrommistakesand

benchmarking)andselfstudy(35,includingreading

businesspress)

49

Workingwithothers Networking,teamwork,peerreview,workingwithHR 30

Mentor

Mentor

67

Discussions Discussionswithconsultants(13),investmentbankers(10),

lawyers(5),andvendors(5)

33

Total 699

Ninerespondentsindicatedthatoutsourcingdidnotapplytotheirjobs. Therewasnothingsystematically

similarabouttheserespondentstoindicatethatoutsourcingislessimportanttoaparticularindustry,jobtitle,

orpublic

vs.

private

organization.

One

individual

stated

that,

A

better

subject

would

be

cost

reduction

and

containment,asoutsourcingisnottheonlywaytogo. TheCFOCompetencyMapinAppendix2incorporates

thesecomments.

About43%of

respondentsfeltthat

Operatorcompetencies

should

be

developed

early

inacareer,60%reportin

themiddleand18%

reportlateinacareer. A

resultsorientationand

administrative

/organizationalskills

wouldbestbedeveloped

earlyin

ones

career.

Five

individualssuggestedthat

anachievement/results

orientationismostly

innate,whiletwo


20/66

CatalystRoleFollowingisthelistofcompetenciesundertheCatalystrole:

1. Leadershipandinfluence(Lead)

2. Communication/presentationskillsandexecutivepresence(Comm)

3. Corporategovernance

(Govern)

4. Negotiation(Negotiate)5. Relationshipbuildingandcollaboration(RelBuild)

6. Personalintegrityandethics(Integrity)

7. Changemanagementandflexibility(Change)

8. Selfawarenessandinsight(Insight)9. Persistence(Persist)

ImportanceofEachCatalystCompetency

Onceagain,allthecompetenciesarerankedasimportanttotheCFOsjob. Personalintegrityandethics

rankedthehighest,asshownbelow,andhadthegreatestconsensus. Onerespondentcharacterizedpersonal

integrityasthepriceofadmission.

Developing Each Catalyst Competency

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Lead Comm Govern Negotiate RelBuild Integrity Change Insight Persist

Importanceof

Each

Competency

Importance:

1=unimportant

2=somewhat

unimportant

3=moderately

important

4=important

5=critical


21/66




Experience Experience,publicaccountingexperience,parental

influence,experienceworkingfordifferentorganizations,

trialanderror,workinginsales

280

Education Education,university,extracurricularactivitiesatschool,

CAtraining, ICD,DDI,humanbehaviorcourses,teamwork

inuniversitycourses,mediatraining

126

Onown Usingobservation(13)andselfstudy(90,includingown

insight,learningwhatmotivatesothers,examiningmistakes

ofothers,practice,readingfinancialpress,beinghumbled)

103

Mentor

Mentor

80

Workingwithothers Networking,teamwork,peerreview(360ofeedback),

volunteering(withjuniorachievement,charities,volunteer

toleadprojects)

19

Discussions Discussionswithauditcommittee(1),communications 9

0

10

20

30

40

50

60

70

80

90

100

NumberofRespondents


FormalEduc

Experience

Mentor


22/66

0

10

20

30

4050

60

70

80

90

100

NumberofR

espondents

WhenDoes

One

Develop

Each

Competency?

Early

Middle

Late

cannotbedeveloped. Followingisalistofcompetenciesandthenumberofrespondentsindicatingtheycant

bedeveloped:

Relationshipbuildingandcollaboration(1respondent)

Personalintegrityandethics(7)

Changemanagementandflexibility(2)

Selfawareness

and

insight

(1)

Persistence(7)

Onerespondenttellsaninterestingstorywithrespecttoselfawarenessandinsight::

Ilearnedtoacceptmylimitations. Butalsotofocusonlifebalance. Followingamajorproject

whereIworkeddayandnight,Iwascalledto[mysuperiors]officeandtoldtogoawayfortwoweeks

andreflect

on

what

is

important

to

me

in

life.

[My

superior]

reminded

me

that

one

needs

to

spend

timereflectingandfocusingonallaspectsofone'slife,includingfamily.

Overall,61%ofrespondentsreportthatCatalystcompetenciesshouldbedevelopedearly,54%sayinmid

career,and21%saylateinacareer. Communication/presentationskillsandexecutivepresence,personal

integrityandethics,self

awarenessand

insight,

andpersistenceshould

bedevelopedearlyin

onescareer.

Leadershipand

relationshipbuilding

shouldbedeveloped

bothearlyandinthe

middle,whiletheremaining

competenciesare

primarilydevelopedin

themiddleofones

career.

StrategistRoleF ll i i th li t f t i d th St t i t l


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8. Advocate/ambassadorfortheorganization(Advocate)

ImportanceofEachStrategistCompetency

Aswith

Catalyst

competencies,

all

the

Strategist

competencies

are

deemed

to

be

quite

important.

Both

strategicandcriticalthinkingwererankedthehighest,withthegreatestconsensusoncriticalthinking.

DevelopingEachStrategistCompetency

Accordingto81%ofrespondents,virtuallyalltheStrategistcompetenciesarebestdevelopedthrough

experience. Mentoringwaschosensecond(44%)andeducationlast(30%). Belowisthechartofhoweach

competencyshouldbedeveloped.

0

0.51

1.5

2

2.5

3

3.5

4

4.5

5

Goal&

Vision

StratRisk

Mgt

StratThink PerfMgmt

Integ

Critical Ambiguity Con

Improve

Advocate

ImportanceofEachCompetency

Importance:

1=unimportant

2=somewhat

unimportant

3=moderately

important

4=important

5=critical


24/66




Experience Experience,learningfromcompetitors,gettingburned,

establishandworktowardcommongoals

224

Education

Education,

university,

extra

curricular

activities

at

school,

CAtraining,seminarsfromDDAandTheDemingCharter 104

Mentor Mentoringfromseniormanagementandboardmembers 66

Onown Usingobservation(8)andselfstudy(51,includingpractice,

selfdiscipline,askingalotofquestions). Beingproudand

believinginwhatyoudo

59

Workingwithothers Networking,teamwork,peerreview(360ofeedback),

volunteering(takingopportunitiestospeakbeforeexternal

groups,joining

action

committees)

10

Discussions Discussionswithauditor(2)andconsultants(1) 3

Total 466

Five respondents indicated that dedication to continuous improvement was innate.

0

10

20

30

40

50

60

70

80

90

Goal&

Vision

StratRisk

Mgt

Strat

Think

Perf

Mgmt

Integ

Critical Ambiguity Con

Improve

Advocate

NumberofRespondents


FormalEduc

Experience

Mentor


25/66

0

10

20

30

40

50

60

70

80

90

Numb

erofRespondents


Competency?

Early

Middle

Late

Takentogether,Strategistcompetenciesshouldbedevelopedduringthemiddleofacareer,asreportedby

66%ofrespondents. 44%

reportthatStrategist

competenciesshouldbe

developedearly,while31%

saidlate

in

acareer.

Accordingtorespondents,

goalsettingandvisioning,

criticalthinking,and

continuousimprovement

shouldbegintobe

developedearlyinones

career.

Theremainder

shouldbegininthemiddle.

Thesecompetenciesalso

receivedthehighestscores

fordevelopinglateinones

career.

FurtherAnalysesItisimportanttounderstandwhetherparticulargroupsofindividualsviewtheCFOrolesandcompetencies

differently. Weexaminedwhetherrespondentsfrompublicvs.privateorganizationsdiffered,andwhether

CFOsvs.nonCFOsrespondeddifferently. Overall,therewerenosignificantdifferencesinresponsestothe

fourroles

of

CFO

and

CEO.

However,

we

found

several

differences

in

the

answers

to

questions

about

the

importanceofcertaincompetenciesaswellasaboutthedevelopmentcertaincompetencies.

Publicvs.PrivateOrganizations

Thoseinpublicorganizationsthoughtthefollowingcompetenciesweresignificantlymoreimportant:o externalfinancialandregulatoryreportingknowledge(Steward)o mergersandacquisitions,strategicalliances(Operator)o strategicthinkinganddecisionmaking(Strategist)o criticalthinking(Strategist)

Thoseinprivateorganizationsthoughtthefollowingcompetenciesweresignificantlymoreimportant:o Workingknowledgeofriskmanagement,budgetandforecastingtools(Steward)o Understanding of financial information systems and informational needs of decision makers


26/66

CFOvs.non-CFOs

ThosewhoareCEOsthoughtthefollowingcompetenciesweresignificantlymoreimportantthanthosewhoareCFOs:

o Understandingoffinancialinformationsystemsandinformationalneedsofdecisionmakers(Steward)

o Fraudprevention,detection,andinvestigation(Steward)o Organizationalandadministrativeskills(Operator)

NonCFOs useeducationsignificantlymorethanCFOstodevelopthefollowingcompetencies:o Externalfinancialandregulatoryreportingknowledge(Steward)o Staffplanning(Operator)o Relationshipbuildingandcollegiality(Catalyst)o Changemanagementandflexibility(Catalyst)o Selfawarenessandinsight(Catalyst)

CFOsusementorssignificantlymorethannonCFOstodevelopchangemanagementandflexibility(Catalyst).

CFOsthoughtthatCatalystcompetenciesshouldbedevelopedprimarilyduringthemiddleofacareer,whilenonCFOsthoughttheyshouldbedevelopedearlyon. Thisdifferenceisespeciallytrueforcorporate

governance.

CFOsalsothoughtgoalsetting/visioning(Strategist)shouldbedevelopedprimarilyinthemiddleofacareer,whilenonCFOsthoughtearlyon.

CFOsuseexperiencesignificantlymorethannonCFOsindevelopingcriticalthinkingskills.

Relativetoeachother,CFOsusemoreexperienceandmentorswhilenonCFOsusemoreeducationin

developingseveralcompetencies. Additionally,CFOsfeelthatthemiddleofacareerisasuitabletimeto

developcertainCatalystandStrategistcompetencies,versusnonCFOswhosuggestearlier.

SummaryandImplicationsSummary

SixoftheeightmostimportantcompetenciesfallwithintheCatalystorStrategistroles. Theyare,inorder:

o Personalintegrityandethics(4.8average,Catalystrole)

o Criticalthinking

(4.6,

Strategist

role)

o Communication/presentationskillsandexecutivepresence(4.6,Catalyst)o Strategicthinkinganddecisionmaking(4.6,Strategist)

o Leadershipandinfluence(4.6,Catalyst)

o Understandingthebusinessenvironment(4.5,Steward)


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o Investmentandcreditriskknowledge(3.8,Steward)

o Projectmanagement(3.8,Operator)

o Staffplanning(3.6,Operator)

o Fraudprevention,detection,investigation(3.6,Steward)

o Outsourcing(3.2,Operator)

Thesoft

skills

found

most

important

by

respondents

are

similar

to

those

identified

in

the

prior

literature

asbestinclass,andaresometimesfoundtobedeficientinCFOs.

Overall,respondentsfoundexperiencetobethebestwaytodevelopcompetencies,especiallyinthe

CatalystandStrategistroles. However,educationandmentorshiparealsosignificantandimportantfor

wellroundeddevelopment.

Thevastmajorityofcompetenciesshouldbedevelopedearlyandcontinueonthroughthemiddleofonescareer. Latedevelopmentisalsoacceptable,butnotnearlyasfrequent. TheStrategistrolehadthe

highestlevel

of

late

development.

Implications

CAsshouldcarefullydevelopallcompetencies,butpayparticularattentiontoseveralofthesoftcompetencieswithintheCatalystandStrategistroles. Beingespeciallycompetentinthesoftskillscanset

aCAapartfromothers.

CAsandfutureCAsshouldvolunteerthroughouttheirlifetimetodevelopseveralsoftcompetencies.Volunteeringcantakeanyofthefollowingforms:

o Atschool,insports,studentcouncilandotherextracurricularactivitieso Atwork,toleadorparticipateonspecialteamsorcommittees,andtalkinfrontofgroupssuchas

businessclubs,investors,orindustrygroups

o Inlife,tohelpcharitiesorsitontheirboards

The

ICAO

and

Queens

University

should

consider

the

many

opportunities

for

early

and

mid

career

educationalprograms. Thefollowinglistisdevelopedbyexaminingrespondentsanswersforcompetency

importanceandwhethereducationisoneofthetoptwobestmethodsofdevelopment:

Competency: Earlyor

Middle*

Workingknowledgeofriskmanagement,budgetandforecastingtools both

Investmentandcreditriskknowledge both

Accountingknowledge

early

Externalfinancialandregulatoryreportingknowledge both

Understandingofsystems,processesandinternalcontrolsoverfinancialinformation both

Fraudprevention,detection,andinvestigation** both

Projectmanagement both

N i i b h


28/66

Negotiation both

Personalintegrity,ethics,abilitytoidentifyethicaldilemmasandmakeethicaldecisions both

Strategicriskmanagement middle

Strategicthinkinganddecisionmaking both

Criticalthinking both


integration

both

*EarlyeducationalprogramsarelikelyincorporatedintoUniversityundergradcourseworkandCAtraining,

whereaseducationalprogramsduringthemiddleofacareerarelikelyprovidedthroughexecutiveeducation,

postgraduateprograms,andCPE.

**Manyoftheabovecompetenciesarealreadyincorporatedintoexistingeducationalprograms. Thebolded

competenciesrepresentopportunitiesforexpandingorofferingnewprograms.

GeneralQuestionsThesurveyendswithbroadandopenendedquestionsregardingwhatshouldbeaddedordeletedfromthe

list,howthecompetenciesorrolesmaychangein5to10years,andhowthecompetenciesorrolesare

differentforCEOsvs.CFOs.

Respondentshadseveralsuggestionsforaddingcompetencies,includingthefollowing:

Understandingtheneedsofdifferentstakeholdersandhowtoworkwiththem(e.g.presentations

madetotheboardrequiredifferentskillsthanthosemadetolabourunions)

Intellectualpropertymanagement

Bridgebuilderwithdifferentgroupswithintheorganization

Socialconscience

Crossoperationalexperience

Businessdevelopment

and

operations

Marketing

Emotionalcontrol

Forwardthinker

Levelheadedness

Respectfrompeers

Severalrespondents

indicated

that

working

with

people

at

all

levels

is

critical.

This

theme

included

developing

subordinates,teambuilding,empoweringsubordinates,andnetworking. TheCompetencyMapinAppendix2

includestheseitems.

The Future CFO

B tt d ti i ti ith t k h ld


29/66

Betterandcontinuouscommunicationwithmanystakeholders

Informationmanagement

Outsourcingasmoreindividualsretire

Asglobalizationincreases,betterunderstandingoftheworldeconomyandbeingmultilingual

Evenmoreadaptabilityandflexibility

Ethicsand

social

responsibility

Riskmanagementduetoheightenedcorporaterisk

ITcapabilities

Corporategovernanceandinternalcontrols

Giventhislist,itappearsthateachrolewillremainimportantwithitsownfutureconsiderations(i.e.IFRS

relatestoSteward,outsourcingrelatestoOperator,corporategovernancerelatestoCatalyst). However,it

appearsthat

most

of

the

items

relate

to

the

Strategist

role

(i.e.

implications

of

environmental

factors,

communicationwithstakeholders,understandingofworldeconomy,adaptabilityandflexibility,ethicsand

socialresponsibility).

RoleDifferences:CEOandCFO

Finally,thesurveyasksanopenendedquestionregardingthedifferencesintheserolesandcompetenciesfor

aCEO

vs.

CFO.

The

theme

in

the

answers

is

unmistakable.

The

CEO

must

excel

in

the

Strategist

competencies,

aswellassomeoftheCatalystcompetencies. Ofthosewhorespondedtothisquestion,almost75%listed

visionary,strategist,externalfocusonstakeholders,macrolevel,andstronginterpersonalskillsasmore

importanttoaCEOthanaCFO. Several(20%)indicatedthattheseskillsarealsorequiredforCFOsbutthe

weightingisgreaterforCEOs.

CFOQualifications

Giventhattherearemanywaystodevelopcompetencies,respondentswereaskedabouttheimportanceof

eachofthefollowingqualificationsforobtainingaCFOposition. Selectionsincludethefollowing:

1. Multiindustryexperience(MultiInd)

2. Organizationsindustryexperience(OrgInd)

3. Internationalexperience(Intl)

4. Experienceoutsidefinancefunction(NotFin)

5. MBA

6. Otherpostgraduatedegree(OtherGrad)?

Themostimportant,onaverage,isexperiencewithintheorganizationsownindustry. Educationintheform

f MBA th t d t d i d th l t l l f i t f d t Th

Respondents


30/66

0

0.5

1

1.5

2

2.5

3

3.5

4

MultiInd OrgInd Intl NotFin MBA OtherGrad

ImportanceofCertainQualificationsforCFO

Importance:

1=unimportant

2=somewhat

unimportant

3=moderately

important

4=important

5=critical

Respondents

fromsmaller

companiesvs.

larger

companies

Thefollowinggroups

feltexperience

outsidethefinance

functionwasmore

important:

NonCFOsvs.

CFOs

Respondents

fromsmaller

companiesvs.largercompanies

ThefollowinggroupsfeltanMBAwasmoreimportant:

Respondentsintheircurrentjobmorethan20yearsvs.thoseintheirjobslessthan20years

Respondents

in

the

financial

services,

insurance

and

real

estate

industries

vs.

those

in

manufacturing

Thefollowinggroupsfeltotherpostgraduatedegreesweremoreimportant:

Olderrespondentsvs.youngerrespondents

Respondentswerealsoaskedwhetheracareerpathwithinindustry(ratherthanthetraditionalpaththrough

CAfirms)wouldbeequallywellsuitedforaCFOrole. Respondentsappeartobedividedwith38respondents

(45%)answeringyesand47respondents(55%)answeringno. Whenaskedwhy,respondentsoften

articulateddetails

about

how

their

own

career

path

served

them

well.

SummaryandImplicationsfromGeneralQuestionsSummary

RespondentsidentifyfutureissueswithineveryCFOrole,withthepredominancebeingwithinthe

Strategistrole.

TheCEOroleissomewhatsimilartotheCFOrolebutwithmuchgreaterweightingontheroleof

Strategist,andgreaterweightingonthatofCatalyst.

IndustryexperienceisimportantforbecomingaCFO.

International experience is more important to younger individuals and is identified as becoming more

Implications


31/66

Implications

CAsshouldseekoutindustryexperience,experiencewithinnonfinancefunctions,andinternational

experience.

ICAO/Queensshouldconsiderofferingspecialindustrytrainingandnonfinancetrainingsessions.

UniversityMBA

programs

should

focus

marketing

efforts

on

individuals

in

the

financial

services,

insurance,

andrealestateindustries.

Organizationsshouldconsiderofferingandemployeeswithinfinanceshouldrequestjobrotation.

FutureQuestionsSeveral

questions

naturally

arise

from

survey

responses.

Following

are

three

key

questions

that

should

be

considered:

WhydoCFOstendtouseeducationlessthannonCFOs(vs.experienceandmentorship),andwhydo

publicorganizationsuseeducationlessthanprivateorganizationsforleadershipdevelopment?

Whatarethefactorsthatcontributetothedifferencesbetweenpublicandprivateorganizations? (The

resultsofthissurveyincludedonly25respondentsfrompubliclyheldorganizations;ofthose,14were

CFOs.)

WhatarethecompetenciesrequiredofaCEO?(Thissurveyexaminedtheimportanceofthefourrolesand

didnotgointodetailaboutCEOcompetencies).

V Competency Map


32/66

V. CompetencyMapAppendix2containstheCFOCompetencyMapandrelateddevelopmentideasforCAs. Thecolouredbars

visuallyshowatwhatpointinacareerearly,middle,orlateaCAshouldbedevelopingeachcompetency.

Eachbarapproximatesthepercentageanswerstothetimingquestioninthesurvey. Withineachbar,the

Mapindicates

the

ranking

of

the

top

three

methods

of

developing

the

competencyexperience,

education,

andmentor. ThepagesthatfollowtheMapprovidethedefinitionsofeachroleandcompetency,andspecific

waystodevelopeachcompetencyastakenfromthesurvey.


33/66

VI. BibliographyThe

Agile

CFO.

(2006).

IBM

Global

Business

Services.

Basedonananalysisofeffectivelyfunctioningfinancefunctions,thispaperconcludesthatto

acceleratetheprovisionofinsight,CFOsmustbeableto:

Updatethefinancestrategytoreflectchangestobusinessgoals.Updateandalignthecurrent

financestrategywithbusinessstrategyandrequirementsforinformationandinsight.

Establishanenterpriseprocessframework.Promoteandensureexecutiveownershipofdataand

processes,implementaformalprogramtoprovidedataandprocessstandards,anddrive

commonprocessesenterprisewide.

Integratetheportfolioofcapabilities.Utilizebothinternalsharedservicesandexternaloutsourcing

fornonstrategicactivities;providedifferentiatingfunctionsthroughtheretainedorganization.

BalancingRiskandPerformancewithanIntegratedFinanceOrganization:TheGlobalCFOStudy2008.(2008).

IBMGlobalBusinessServices.

ThisextensivestudyexploredthewaysCFOsandseniorfinanceprofessionalsareaffectedbyanddeal

withperformance,risks,operationalleversandgovernance.Theprimarythrustoftheresearch

focusedonhypothesesabouttheCFOschoicetousedifferingfinancialmanagementgovernance

models,and

their

role

and

effectiveness

in

risk

management.

DesRoberts,G.(2003).CFOs:Areturntocorevalues.CAMagazine,March.

Eldridge,C.B.andBrousseau,K.R.(2007).NavigatingtheUncertainRoad

FromCONTROLLERtoCFO:TheLeadershipImperative.KornFerryConsulting.

TheinformationpresentedinthisreportisbasedontheminingoftheKornFerrydatabasewhich

consistsof500,000profilesofbusinessexecutivesworldwide. Thisanalysissuggeststhateffective

CFOstendtofocusonpeopleissuesaswellastheirtraditionalfinancialgovernanceresponsibilities.

They tend to leverage interpersonal relationships to help them make better decisions and tend

TheFourFacesoftheCFO.(2007). Deloitte.Source:


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http://www.deloitte.com/dtt/article/0,1002,cid%253D181433,00.html,accessedApril1,2008.

AframeworkthatstructurestheCFOrolebasedon4faces:Catalyst,Strategist,Operatorand

Steward.

Militello, F. C. and Schwalberg. (2002). Leverage Competencies: The key to financial leadership success.Upper Saddle River, NJ : Prentice Hall.

Propeo Perspectives: CFO. (2008). Propeo Executive Search.

Propeois

an

executive

search

firm

and

they

list

five

key

competencies/abilities

that

companies

are

lookingforinaCFO:

IntegratingtheFinancefunctionwiththerestoftheorganization,redefiningitsroleandretrainingstaffto

fullyunderstandbusinessoperationsanddrivers

Strategicallythinkingthroughhowthebusinessshouldbestapplyitscapitalresources,bringingtobear

traditionalpowersofanalysisandcommercialjudgmenttoanswerthisquestion

Developingmanagement

control

methods,

producing

new

sets

of

strategic

measures

that

managers

can

use

toanticipatechallengesandmonitorprogress

Puttinginplacelongtermcostmanagementprogramsthatreplacetraditional"costaccounting"activities

Tucker,Simon.(2007).TheCFO2.0:FromBeanCountertoSomeoneYouCanCountOn.BusinessFoundation.

Thisprovides

abrief

comment

on

the

evolution

of

the

CFO

role

from

bean

counter

to

one

that

requiresamuchmorestrategicorientationthatmustbalanceregulatorypressures,theneedto

performaspromisedtothestakeholdersandgrowthyearafteryear.


35/66

Appendix1: TheSurvey(administeredviatheweb)

ICAO CFO Competency Survey


36/66

Thank you for taking the time to complete this 1020 minute survey. By doing so, you will assist Chartered

Accountants in planning a career towards becoming a CFO for a publicly-held company.

The purpose of this research is to:

1. identify the key competency needs that recently qualified Chartered Accountants need to develop throughthe various stages of their careers with the ultimate goal of becoming a Chief Financial Officer in a publiccompany, and

2. identify the key areas that a Chief Financial Officer needs to address to advance to Chief Executive Officerif and when the opportunity arises.

Please read the Combined Letter of Information and Consent Form and print a copy for your own records.

1. After you have read the consent form, please choose the appropriate button below.

Introduction

I have read the consent form and agree to participatenmlkj

I do not agree to participatenmlkj



37/66

Click here to see the list of competencies and definitions.

1. Do the 4 roles of the CFO described above accurately capture the main activities of the CFO?

The Four Roles of the CFO

Previous Next

Following are four roles of the CFO:

Steward

Accounting, control, risk management and asset preservation are the province of the Steward. The Steward must ensure company

compliance with financial reporting and control requirements. Information quality and control rationalization are top-of-mind issues

for the Steward.

Operator

Efficiency and service levels are the primary areas of focus for the Operator. The Operator must dynamically balance cost and

service levels in delivering on the finance organization's responsibilities, and adapt finance's operating model as necessary. Talent

management, offshoring and shared service decisions are often the key issues to be addressed. This role is oriented toward best

practices of the finance function itself.

CatalystThe Catalyst is an agent for change, focused on establishing a value attitude throughout the organization. The Catalyst gains

business alignment to identify, evaluate and execute strategies, and serves as a business partner to other decision makers

including business unit leaders, the chief information officer, and sales and marketing leaders. The Catalyst establishes a

structure of enterprise accountability for results, drives enterprise execution and gains acceptance from business management as

the organization's catalyst. This role is oriented toward best practices of the entire organization.

Strategist

The Strategist is a director, focused on defining the future of the company to enhance business performance and shareholder

value. The Strategist provides a financial perspective on innovation and profitable growth; leverages this perspective to improve risk -

awareness, strategic decision-making and performance management integration; and translates the expectations of the capital

markets into internal business imperatives. This role is oriented toward long-term, strategic issues, and is outwardly directed.

Yes

Nonmlkj

If no, please explain (i.e., what other roles might you include or which roles might you remove?)


2 Pl i di t h i t t h f th diff t l i t th ff ti f ti i f CFO


38/66

2. Please indicate how important each of the different roles is to the effective functioning of a CFO:

3. Please indicate how much time a CFOspends on each of these roles:

4. Please indicate how important each of the different roles is to the effective functioning of a CEO:

UnimportantSomewhat

Unimportant

Moderately

ImportantImportant Critical

Steward nmlkj nmlkj nmlkj nmlkj nmlkj

Operator nmlkj nmlkj nmlkj nmlkj nmlkj

Catalyst nmlkj nmlkj nmlkj nmlkj nmlkj

Strategist nmlkj nmlkj nmlkj nmlkj nmlkj

Least

1 2 3 4

Most

5

Steward nmlkj nmlkj nmlkj nmlkj nmlkjOperator nmlkj nmlkj nmlkj nmlkj nmlkj



[Top]

Unimportant SomewhatUnimportant

ModeratelyImportant

Important Critical

Steward nmlkj nmlkj nmlkj nmlkj nmlkj

Operator nmlkj nmlkj nmlkj nmlkj nmlkj



[Top]


St d


39/66

This section lists eight or nine competencies within each of the four CFO roles. To view the definition of eachcompetency, click on the link below.

Click here to see the list of competencies and definitions.Competencies Required for the Steward Role

Accounting, control, risk management and asset preservation are the province of the Steward. The Steward must

ensure company compliance with financial reporting and control requirements. Information quality and controlrationalization are top-of-mind issues for the Steward.

1. Rate the importance of the following competencies for the CFOin the role of Steward.

Steward

Previous Next

UnimportantSomewhat

Unimportant

Moderately


Working knowledge of

risk management, budget

and forecasting tools

nmlkj nmlkj nmlkj nmlkj nmlkj

Investment and credit

risk knowledgenmlkj nmlkj nmlkj nmlkj nmlkj

Accounting knowledge

(GAAP and taxation)nmlkj nmlkj nmlkj nmlkj nmlkj

External financial and

regulatory reporting

knowledge


Understanding of

financial information

systems and

informational needs of

decision makers


Understanding of

systems, processes and

internal controls over



Understanding the

business environmentnmlkj nmlkj nmlkj nmlkj nmlkj

Fraud prevention, nmlkj nmlkj nmlkj nmlkj nmlkj


2 Which are the best ways to develop the following competencies in the role of Steward? (Select any or all )


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2. Which are the best ways to develop the following competencies in the role of Steward? (Select any or all.)

Formal education program/seminar On own through job experience With the help of a mentor


risk management,

budget and forecastingtools

gfedc gfedc gfedc


risk knowledgegfedc gfedc gfedc


(GAAP and taxation)gfedc gfedc gfedc



knowledge

gfedc gfedc gfedc

Understanding of


systems and


decision makers

gfedc gfedc gfedc

Understanding of

systems, processes andinternal controls over


gfedc gfedc gfedc

Understanding the

business environmentgfedc gfedc gfedc

Fraud prevention,

detection and

investigation

gfedc gfedc gfedc

[Top]


3. From your experience, please describe the ways in which you developed the following competencies in the role of Steward. (Up


41/66

3. From your experience, please describe the ways in which you developed the following competencies in the role of Steward. (Up

to 100 characters.)

Working

knowledge of risk

management,budget and

forecasting tools

Investment and

credit risk

knowledge

Accounting

knowledge (GAAPand taxation)

External financial

and regulatory

reporting

knowledge

Understanding of

financial

information

systems and

informational

needs of decision

makers

Understanding of

systems,

processes and

internal controls

over financial

information

Understanding the

business

environment

Fraud prevention,detection and

investigation

[Top]


4. Approximately when during one's career should the following competencies be developed in the role of Steward? (Select any or


42/66

pp y g g p p ( y

all.)

Early Middle Late


risk management,budget and forecasting

tools

gfedc gfedc gfedc


risk knowledgegfedc gfedc gfedc


(GAAP and taxation)gfedc gfedc gfedc



knowledge

gfedc gfedc gfedc

Understanding of


systems and


decision makers

gfedc gfedc gfedc

Understanding of

systems, processes and

internal controls over


gfedc gfedc gfedc

Understanding the

business environmentgfedc gfedc gfedc

Fraud prevention,

detection and

investigation

gfedc gfedc gfedc

[Top]


Operator


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Click here to see the list of competencies and definitions.Competencies Required for the Operator Role

Efficiency and service levels are the primary areas of focus for the Operator. The Operator must dynamicallybalance cost and service levels in delivering on the finance organization's responsibilities, and adapt finance'soperating model as necessary. Talent management, offshoring and shared service decisions are often the keyissues to be addressed. This role is oriented toward best practices of the finance function itself.

1. Rate the importance of the following competencies for the CFOin the role of Operator.

Operator

Previous Next

UnimportantSomewhat

Unimportant

Moderately


Staff planning nmlkj nmlkj nmlkj nmlkj nmlkj

Project management nmlkj nmlkj nmlkj nmlkj nmlkj

Staff management,

empowerment, team

building, andaccountability


Corporate finance nmlkj nmlkj nmlkj nmlkj nmlkj

Treasury and investment

managementnmlkj nmlkj nmlkj nmlkj nmlkj

Mergers and

acquisitions, strategic

alliances


Outsourcing nmlkj nmlkj nmlkj nmlkj nmlkj

Achievement / results

orientationnmlkj nmlkj nmlkj nmlkj nmlkj

Organizational and

administration skillsnmlkj nmlkj nmlkj nmlkj nmlkj

[Top]


2. Which are the best ways to develop the following competencies in the role of Operator? (Select any or all.)


44/66

3. From your experience, please describe the ways in which you developed the following competencies in the role of Operator.

(Up to 100 characters.)


Staff planning gfedc gfedc gfedc

Project management gfedc gfedc gfedc

Staff management,

empowerment, team

building, and

accountability

gfedc gfedc gfedc

Corporate finance gfedc gfedc gfedc


managementgfedc gfedc gfedc

Mergers andacquisitions, strategic

alliances

gfedc gfedc gfedc

Outsourcing gfedc gfedc gfedc


orientationgfedc gfedc gfedc

Organizational and

administration skillsgfedc gfedc gfedc

[Top]

Staff planning

Project

management

Staff management,

empowerment,

team building, and

accountability

Corporate finance

Treasury and

investment

management

Mergers and

acquisitions,

strategic alliances


4. Approximately when during one's career should the following competencies be developed in the role of Operator? (Select any or


45/66

all.)

Early Middle Late

Staff planning gfedc gfedc gfedc

Project management gfedc gfedc gfedc

Staff management,

empowerment, team

building, and

accountability

gfedc gfedc gfedc

Corporate finance gfedc gfedc gfedc


management

gfedc gfedc gfedc

Mergers and

acquisitions, strategic

alliances

gfedc gfedc gfedc

Outsourcing gfedc gfedc gfedc


orientationgfedc gfedc gfedc

Organizational and

administration skillsgfedc gfedc gfedc

[Top]


Catalyst


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Click here to see the list of competencies and definitions.Competencies Required for the Catalyst Role

The Catalyst is an agent for change, focused on establishing a value attitude throughout the organization. TheCatalyst gains business alignment to identify, evaluate and execute strategies, and serves as a business partnerto other decision makers including business unit leaders, the chief information officer, and sales and marketingleaders. The Catalyst establishes a structure of enterprise accountability for results, drives enterprise executionand gains acceptance from business management as the organization's catalyst. This role is oriented toward

best practices of the entire organization.

1. Rate the importance of the following competencies for the CFOin the role of Catalyst.

Previous Next

UnimportantSomewhat

Unimportant

Moderately


Leadership and influence nmlkj nmlkj nmlkj nmlkj nmlkj

Communication /

presentation skills and

executive presence


Corporate governance nmlkj nmlkj nmlkj nmlkj nmlkj

Negotiation nmlkj nmlkj nmlkj nmlkj nmlkj

Relationship building and

collaborationnmlkj nmlkj nmlkj nmlkj nmlkj

Personal integrity and

ethicsnmlkj nmlkj nmlkj nmlkj nmlkj

Change management

and flexibilitynmlkj nmlkj nmlkj nmlkj nmlkj

Self-awareness and

insightnmlkj nmlkj nmlkj nmlkj nmlkj

Persistence nmlkj nmlkj nmlkj nmlkj nmlkj

[Top]


2. Which are the best ways to develop the following competencies in the role of Catalyst? (Select any or all.)

F l d i / i O h h j b i Wi h h h l f


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3. From your experience, please describe the ways in which you developed the following competencies in the role of Catalyst. (Up

to 100 characters.)


Leadership and influence gfedc gfedc gfedc

Communication /

presentation skills andexecutive presence

gfedc gfedc gfedc

Corporate governance gfedc gfedc gfedc

Negotiation gfedc gfedc gfedc


collaborationgfedc gfedc gfedc

Personal integrity and

ethics

gfedc gfedc gfedc

Change management

and flexibilitygfedc gfedc gfedc

Self-awareness and

insightgfedc gfedc gfedc

Persistence gfedc gfedc gfedc

[Top]

Leadership and

influence

Communication /

presentation skills

and executive

presence

Corporate

governance

Negotiation

Relationship

building and

collaboration

Personal integrity

and ethics

Change

management and

fl ibili


4. Approximately when during one's career should the following competencies be developed in the role of Catalyst? (Select any or

all )


48/66

all.)

Early Middle Late

Leadership and influence gfedc gfedc gfedc

Communication /presentation skills and

executive presence

gfedc gfedc gfedc

Corporate governance gfedc gfedc gfedc

Negotiation gfedc gfedc gfedc


collaborationgfedc gfedc gfedc

Personal integrity andethics

gfedc gfedc gfedc

Change management

and flexibilitygfedc gfedc gfedc

Self-awareness and

insightgfedc gfedc gfedc

Persistence gfedc gfedc gfedc

[Top]


Strategist


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Click here to see the list of competencies and definitions.Competencies Required for the Strategist Role

The Strategist is a director, focused on defining the future of the company to enhance business performance andshareholder value. The Strategist provides a financial perspective on innovation and profitable growth; leveragesthis perspective to improve risk-awareness, strategic decision-making and performance managementintegration; and translates the expectations of the capital markets into internal business imperatives. This role isoriented toward long-term, strategic issues, and is outwardly directed.

1. Rate the importance of the following competencies for the CFOin the role of Strategist.

Previous Next

UnimportantSomewhat

Unimportant

Moderately


Goal setting and

visioningnmlkj nmlkj nmlkj nmlkj nmlkj

Strategic risk

managementnmlkj nmlkj nmlkj nmlkj nmlkj

Strategic thinking and

decision-makingnmlkj nmlkj nmlkj nmlkj nmlkj

Performance

management integrationnmlkj nmlkj nmlkj nmlkj nmlkj

Critical thinking nmlkj nmlkj nmlkj nmlkj nmlkj

Managing ambiguity nmlkj nmlkj nmlkj nmlkj nmlkj

Dedication to continuous

improvementnmlkj nmlkj nmlkj nmlkj nmlkj

Advocate / ambassador

for the organizationnmlkj nmlkj nmlkj nmlkj nmlkj

[Top]


2. Which are the best ways to develop the following competencies in the role of Strategist? (Select any or all.)



50/66

3. From your experience, please describe the ways in which you developed the following competencies in the role of Strategist.

(Up to 100 characters.)


Goal setting and

visioninggfedc gfedc gfedc

Strategic riskmanagement

gfedc gfedc gfedc


decision-makinggfedc gfedc gfedc

Performance

management integrationgfedc gfedc gfedc

Critical thinking gfedc gfedc gfedc

Managing ambiguity gfedc gfedc gfedc


improvementgfedc gfedc gfedc


for the organizationgfedc gfedc gfedc

[Top]

Goal setting and

visioning

Strategic risk

management

Strategic thinking

and decision-

makingPerformance

management

integration

Critical thinking

Managing

ambiguity

Dedication to

continuous

improvement

Advocate /

ambassador for the


4. Approximately when during one's career should the following competencies be developed in the role of Strategist? (Select any

or all.)


51/66

)

Early Middle Late

Goal setting and

visioninggfedc gfedc gfedc

Strategic risk

managementgfedc gfedc gfedc


decision-makinggfedc gfedc gfedc

Performance

management integrationgfedc gfedc gfedc

Critical thinking gfedc gfedc gfedc

Managing ambiguity gfedc gfedc gfedc


improvementgfedc gfedc gfedc


for the organizationgfedc gfedc gfedc

[Top]


General Questions


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Click here to see the list of competencies and definitions.

Please answer the following general questions.

1. Are there any competencies that do not belongin this list or are included under the wrong role? If so, which ones and why?

2. Are there any other competencies you would addto this list? If so, please explain.

3. Are there any competencies whose importance for a CFO are likely to change in the next 5 to 10 year? If so, which ones and

in what way?

4. How might these competencies be different for the role of CEOrather than CFO?

Previous Next

[Top]

[Top]


5. Acknowledging that there are different ways to gain competencies, how important are the following qualifications for being

considered for a CFO position (assuming the individual has a CA)?


53/66

6. Do you think a CA career path within industry (rather than the traditional path through CA firms) would be equally well suited for

a CFO role?

UnimportantSomewhat

Unimportant

Moderately


Multi-industry experience nmlkj nmlkj nmlkj nmlkj nmlkj

Organization's industry

experiencenmlkj nmlkj nmlkj nmlkj nmlkj

International experience nmlkj nmlkj nmlkj nmlkj nmlkj

Experience outside

finance functionnmlkj nmlkj nmlkj nmlkj nmlkj

MBA nmlkj nmlkj nmlkj nmlkj nmlkj

Other postgraduate

degree nmlkj nmlkj nmlkj nmlkj nmlkj

[Top]

Please specify other postgraduate degree:

Yesnmlkj No

nmlkj

Please explain.


Demographic Information


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Please provide the following demographic information.

1. Age (in years):

2. Gender:

3. What is your job title within your organization?

4. Length of time in current job (in years):

5. What was your previous job title?

6. Length of time in previous job (in years):

7. Do you have a CA certification?

8. In which broad industry category does your organization belong?

Previous Next

[Top]

Less than 30nmlkj 31 - 40

nmlkj 41 - 50

nmlkj 51 - 60

nmlkj 60 +

nmlkj

Malenmlkj Female

nmlkj

CEOnmlkj CFO

nmlkj VP - Finance

nmlkj President

nmlkj Executive

Recruiter

nmlkj

Other (please specify)nmlkj

0 - 5nmlkj 6 - 10

nmlkj 11 - 20

nmlkj 20 +

nmlkj

0 - 5nmlkj 6 - 10

nmlkj 11 - 20

nmlkj 20 +

nmlkj

Yesnmlkj No

nmlkj

If yes, how long have you held it (in years)?


10. Is your organization publicly traded?

Yesnmlkj No

nmlkj


55/66

11. What is the approximate current value of your company's assets (in Canadian dollars)?

12. What is the approximate value of your company's annual sales (in Canadian dollars)?

[Top]

Yesnmlkj Nonmlkj

Less than

$10 Million

nmlkj $10 - $100

Million

nmlkj $100 - $500

Million

nmlkj $500 -

$1000 Million

nmlkj $1 - $10

Billion

nmlkj More than

$10 Billion

nmlkj N/Anmlkj

Less than

$10 Million

nmlkj $10 - $100

Million

nmlkj $100 - $500

Million

nmlkj $500 -

$1000 Million

nmlkj $1 - $10

Billion

nmlkj More than

$10 Billion

nmlkj N/A

nmlkj


Conclusion


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This completes the survey. Thank you very much for your time!

If you would like to receive information on the results of this survey, please contact Pamela Murphy at

[email protected].

Appendix 2: The CFO Competency Map


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54

Appendix2: TheCFOCompetencyMap

MovingFromCAtoCFO:ACompetencyFramework


58/66


59/66

56

StewardCompetencies:.EARLY

.MIDDLE. ..LATE.....

Workingknowledgeofriskmanagementbudget,

andforecastingtools

1)experience,2)education,3)

mentor

Investmentandcreditriskknowledge


mentor

Accountingknowledge(GAAPandtaxation)1)

education,

2)

experience,

3)

mentor

Externalfinancialandregulatoryreporting

knowledge

1)education,2)experience,3)

mentor

Understandingoffinancialinformationsystemsand

1)experience,2)mentor,3)

education

informationalneedsofdecisionmakers

Understandingofsystems,processesandinternal

controlsoverfinancial

information


mentor

Understandingthebusinessenvironment


education

Fraudprevention,detection,andinvestigation


mentor

.EARLY .MIDDLE ..LATE........


60/66

57

OperatorCompetencies:

Staffplanning


education

Projectmanagement


mentor

Staffmanagement,mentoring,teambuilding,

andcreatingaccountability


education

Corporatefinance


mentor

Treasuryandinvestmentmanagement


mentor

Mergersandacquisitions,strategicalliances

1)experience,2)and3)educationand

mentor(tied)

Maximizingcapitalemployed


education

Achievement/resultsorientation


education

Organizationalandadministrativeskills


education

Catalyst Competencies:



61/66

58

CatalystCompetencies:

Leadershipand

influence


education

Communication/presentationskillsand

executivepresence


mentor

Corporategovernance


mentor

Negotiation


education

Relationshipguidingandcollaboration


education

Personalintegrity,ethics,abilitytoidentify

ethicaldilemmasandmake

Ethicaldecisions


education

Changemanagementandflexibility


education

Selfawarenessandinsight1)

experience,

2)

mentor,

3)

education

Persistence


education

StrategistCompetencies:



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59

Goalsetting

and

visioning


education

Strategicriskmanagement


mentor

Strategicthinkinganddecisionmaking


education

Performancemanagementintegration


mentor

Criticalthinking


education

Managingambiguity


education

Dedica

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ICAO Report CA to CFO

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