While the role of CFO has never been without challenges, today's CFO is facing ones never imagined even a decade ago.

When you think of occupations with high rates of burnout, you think of ones where there are tremendous pressures placed on the individual, long hours, little to no downtime and dramatic consequences for failure. Nursing and air traffic control are two that instantly come to mind.

Certainly one of the last places you’d expect to find high rates of turnover are in the cushy corner offices of CFOs. After all, they are paid well, they have staff to do most of the real work and seemingly their biggest challenge is being the sounding board for the CEO’s flights of fancy, right?

Wrong. The reality is that while the role of CFO has never been without challenges, today’s CFO is facing ones never imagined even a decade ago. What’s a CFO to do?

Risky Business
Becoming a C-level executive is the natural aspiration of most young professionals. The achievement says you have mastered your profession, earned your place among the best and brightest and are worthy of setting corporate direction. However, would-be aspirants for financial executive positions are thinking twice about climbing the corporate ladder. Even the top performers realize that the role of CFO requires superhuman capabilities these days. Pressures both internal and external conspire to make the position nearly untenable.

What has changed? One explanation is that today’s CFO has too many “customers.” There are peers who desire voluminous amounts of data to justify decisions, shareholders demanding greater transparency, government agencies imposing increasingly stringent regulations, activists calling for reform and financial analysts wanting a greater level of detail.

Another issue is that today’s CFO is expected to master many complex and disparate specialties such as regulatory compliance, executive compensation, IPO activity and off-shoring. And, as a member of the senior management team, the CFO must champion the corporate governance program and participate in operations planning and analysis, strategic planning, mergers and acquisitions. If all of this isn’t quite enough, the CFO is also expected to provide the CEO and board with insightful counsel. CFOs also make convenient scapegoats; many take the hit for the boss when things go wrong.

Eye-Opening Statistics
In January 2007, CFO Research Services and Tatum LLC surveyed nearly 170 CFOs, controllers and other senior finance executives from companies of all sizes and industries. An astounding 86 percent of respondents said the breadth of the finance function’s responsibility has increased at their companies in the past five years. Specifically, respondents say that they are spending more time on strategy, regulatory compliance, financial planning and analysis, overseeing business operations and responding to requests for information from the board of directors. However, only 49 percent reported an increase in resources. Given the increases in accountability, expectations and workload, it is not surprising that nearly one-third of the respondents said that they were likely to move to a new company within one year. But, would the grass be greener at the next company?

According to Forbes, the average CFO lasts a little more than three years on the job. This high rate of turnover is a costly distraction for companies who should be channeling their energy into building corporate strategy rather than searching for their next CFO.

Anatomy of a Quagmire
What keeps CFOs up at night? Where should we begin?

Today’s regulatory environment is more complex and reporting requirements more numerous than ever before. As a result, CFOs spend a lot of time dealing with compliance issues and scrambling to provide greater levels of detail in shorter amounts of time.

Sarbanes-Oxley has made board members understandably more sensitive to liability issues. As a result, they are demanding more granularity in the information they get from the CFO. In an effort to understand the ramifications of Sarbanes-Oxley accountability, they are turning to the CFO to provide guidance and leadership.

Internally, CFOs are called upon by their colleagues to provide data and forecasts to help them make strategic decisions. When the data is missing or erroneous, it is easy to blame the CFO. CEOs especially depend on CFOs as their primary confidants. Yet, this relationship comes at a price; CFOs often take the bullets aimed at the CEO.

All of this leaves little time for training and managing staff, which is a recipe for failure. With inadequate coaching and mentoring, lower-level staff will find it difficult to be successful in their roles, especially given the complexities of today’s finance function. This will result in dissatisfied employees and high turnover rates, which in turn put more demands on the CFO’s time to recruit and train replacements.

Constructing a Safety Net
Clearly, today’s CFOs are stretched too thin. With insufficient support, even the best will burn out sooner or later. The first step toward rectifying the problem is to acknowledge that the responsibilities associated with the CFO role are too much for one person to handle and that the role should be viewed as a function rather than a single post.

On this front, many audit committees are playing the role of partner and advocate for CFOs, especially when it comes to convincing the CEO to adequately fund the CFO organization. However, the relationship between the CFO and audit committee can become stifling for a CFO, who has to deal with a higher level of inquiry from the committee due to the obligations imposed on it by Sarbanes-Oxley, etc. Likewise, audit committees have to maintain a respectable distance from the CFO to ensure their watchdog role isn’t compromised.

Today’s regulatory demands, volatile economic circumstances and complex market conditions require specialized competencies. In response, companies have created new, function-specific finance positions to support and complement the CFO.

For example, the numerous recent corporate accounting scandals, Sarbanes-Oxley and recommendations of federal sentencing guidelines have prompted many companies to appoint chief compliance officers (CCOs). The CCO’s responsibilities often include leading enterprise compliance efforts; designing and implementing internal controls, policies and procedures to assure compliance with applicable local, state and federal laws and regulations and third party guidelines; managing audits and investigations into regulatory and compliance issues; and responding to requests for information from regulatory bodies.

External resources can also provide much-needed support to a CFO, especially in matters outside his or her comfort zone. In these instances, specialists should be brought in to provide guidance on technical issues such as M&As or turnaround management, which is uncharted territory for many companies.

There’s no denying that the responsibilities of the CFO have expanded exponentially in the last few years. Companies that embrace the “finance team” organizational model enable the CFO to fulfill his or her role as a financial strategist – an important role in and of itself. Risk is mitigated by having specialists and experts on the team who can provide leadership on specific issues. The key to success is to continually reassess the needs of the company and to adjust the finance function.

Companies with long-term vision will realize that it is in their best interest to have a strong and stable CFO function that can meet the ever-changing and ever-increasing demands of both its internal and external clients. Accordingly, these companies will do everything in their power to ensure the CFO function is fully supported and sustainable. These are the companies that will come out ahead.

George Gallinger is a director with J.H. Cohn LLP's Corporate Governance Services practice. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it