Good morning,
As the role of the CFO continues to evolve, what qualifications are CEOs and boards seeking for the position? And what are they demanding of current CFOs?
To find out, I had a conversation with Joel von Ranson, a partner and global functional practice leader at Spencer Stuart, an executive search and leadership consulting firm. von Ranson, who has been with the firm for 22 years, specializing in the areas of finance and governance, has insight into what companies seek in a finance chief and imperatives set by corporate boards of directors.
He shared three areas where CEOs and boards are putting the most pressure on CFOs:
Data fluency: Companies are looking for CFOs to be very savvy about data and analytics, finding ways to use analytics more broadly and extensively, like artificial intelligence and machine learning. It’s increasingly a critical skill set that companies want CFOs to have.
Succession planning: The CEO and the board want CFOs who are best in class at identifying finance talent for succession, building more diverse and inclusive finance teams, and attracting the workforce of tomorrow. Those pressures and expectations are increasing.
Environmental, Social, Governance (ESG) expertise: Companies want CFOs to measure ESG, talk to investors about it, and perhaps try to turn it into a source of competitive advantage.
In regard to ESG measurement, The U.S. Securities and Exchange Commission (SEC) voted last month to propose mandatory climate-risk disclosures by public companies. And the rules would require climate-related financial statement metrics. “The SEC is asking you to put some numbers behind what you’re doing rather than just making fluffy or vague statements,” Jill Klindt, SVP and CFO at Workiva, recently told me. Being front and center in ESG reporting, “is the next step in the evolving role,” Klindt says.
von Ranson also shared an interesting observation about CFOs and board membership. “CFOs are still definitely in high demand,” he explains. “But we have seen that CFOs are competing with others for seats on the board who have human capital or technology expertise. And there’s been a little bit of a decline in the percentage of Fortune 500 directors who are CFOs in the last few years.” A CFO that brings financial expertise, along with other vital skill sets, are the ones who often get chosen to be on boards, he says.
During our discussion, I asked von Ranson what CFOs are saying about inflation. “I was at a conference recently, and there was a lot of talk about inflation as a real concern,” he told me. But the question most CFOs have in mind is “how much will inflation drop this year?” von Ranson says. “And Ukraine is a big concern and the impact that could have on global food and energy prices.”
Is a recession also a concern? He’s not hearing overwhelming concerns from CFOs about it. “But there’s certainly talk about scenario planning,” he says.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
Big deal
Goldman Sachs Asset Management released the annual global insurance survey on April 4. The firm conducted a survey of 328 CFOs and CIOs at insurance companies in the Americas, Asia, and Europe, the Middle East and Africa (EMEA), representing over $13 trillion in global balance sheet assets. About 74% of respondents in the Americas, 76% in EMEA, and 67% in Asia said inflation will last 2-5 years. "Insurers now see rising inflation and tighter monetary policy as the largest threats to their portfolios, with rising interest rates displacing low yields as the primary investment risk cited by insurers," according to the report. That is a sharp reversal from the past two years, Goldman Sachs noted. The report also found that insurers continue to prioritize ESG factors in investment-decisions planning over the next year to increase their allocation most significantly to private equity (44%) and green or impact bonds (42%).
Going deeper
A new Harvard Business Review report, How Teams Are Retaining Employees Right Now, offers five principles to help teams connect, create a sense of belonging, and show team members that they are indeed valued.
Leaderboard
John Crimmins will retire from his position as CFO at Burlington Stores, Inc. (NYSE: BURL), an off-price retailer, by August 31 or the date his successor commences employment. Burlington has initiated an external search for a new CFO. Crimmins, 65, became Burlington’s CFO in October 2019 after serving in that capacity on an interim basis since September 2019. Prior to this role, Crimmins was Burlington’s EVP of finance. He first came to the company in 2011 as SVP of finance, chief accounting officer. Prior to joining Burlington, Crimmins worked at Timberland serving as chief accounting officer and CFO.
Jandy Tomy was named interim CFO at Cars.com Inc. (NYSE: CARS), an automotive marketplace platform. Sonia Jain, CFO, has resigned effective April 15. Jain will be leaving the company to pursue a new opportunity with a pre-IPO, venture capital-backed company. Tomy is VP and treasurer at the company. She has been at Cars.com since March 2017 and has more than 20 years of public company experience in various financial and accounting roles. Tomy previously served as Cars.com CFO from Jan. 2020 through June 2020. A search firm has been retained to fill the permanent CFO position.
Overheard
“Musk could try to take a more aggressive stance here on Twitter. This eventually could lead to some sort of buyout.”
—Wedbush analyst Dan Ives commented Monday on CNBC’s “Squawk Box" about Tesla CEO Elon Musk purchasing a giant stake in Twitter.
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