Many US companies are looking to hire a Finance chief who can impose financial discipline and bring a new level of managerial expertise. A successful candidate must have experience dealing with investors and lenders, taking companies public, knowledge of tech-specific regulations and accounting practices, and the tolerance to work punishing hours for a fast-growing, cash-burning enterprise.
A new trend has emerged
This year, most of the positions in many US companies are occupied by candidates hired from outside their companies. Ford Motor Co. And Intel Corporation hired outsiders as financial chiefs in recent months. Outsourcing of the chief executive role is rising as well.
US companies are looking for candidates who have worked at the business unit level or who have experience working closely with functional and business unit leaders. As companies turn to new markets for their products and services, outside CFO candidates with international experience are highly valued.
3 major reasons for hiring outside CFO Candidates are:
- Outside candidates bring a fresh perspective without resorting the old strategies when solving problems. They enforce substantial changes in how a company’s finance function is run.
- In order to bring in specific skills at a critical moment in the business. As a catalyst for change in a sector going through some kind of transformation.
- To maximize the pool of ‘top-tier’ candidates available for targeting. A broad approach to creating a more diverse leadership team and a talent strategy that puts leadership ability above purely technical skills.
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Amit Mehrotra, a lead analyst at Deutsche Bank, voiced his opinion on hiring outside CFO candidates, saying,
“It helps to have new thinking to change the direction of the ship more dramatically. It is clearly a pivot for companies to bring in new blood and new talent.”
Some companies may not have a choice but to look outside. Stock market and the expansion of the finance chief role increasingly encompassing responsibilities for human resources, information technology and operations have prompted some finance chief to quit or retire early.
Another example of outside hiring came from United Parcel Service Inc. when the company announced Brian Newman, an executive vice president for finance and operations for Latin America at beverage maker PepsiCo Inc., as finance chief, diverting from the company’s longstanding preference for home-grown talent.
Do you think this is a good trend? Let us know your thoughts.