Boyden's Kerry Moynihan shares expert opinion on the critical role of the CFO amidst the pandemic with Bloomberg
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Companies facing finance chief vacancies are leaning on existing executives to deal with business disruptions from the coronavirus pandemic, sometimes by dividing duties or delaying retirement.
Lululemon Athletica Inc. is reassigning tasks among others on its finance team while searching to replace Chief Financial Officer Patrick “PJ” Guido, who’s leaving in May for another CFO job outside the apparel industry. Lufthansa AG similarly split up its finance role after CFO Ulrik Svensson resigned for health reasons earlier this month. At Delta Air Lines Inc., its longtime CFO Paul Jacobson is postponing retirement to help weather a record drop in travel. The airline’s CEO asked Jacobson to stay on, in part because of his experience navigating a crisis in the years after the Sept. 11 terrorist attacks.
The focus on finance roles comes as the Covid-19 virus puts pressure on corporate cash reserves and forces some industries like retail to rapidly reinvent their business models. CFOs also play a key role in decisions on furloughing or laying off workers, cutting back on pay, and seeking government aid. “Right now, it’s all about the CEO and CFO,” said Jack McCullough, president of the CFO Leadership Council, a professional association for financial executives. McCullough is a former CFO who also previously directed a center for startups at auditing firm KPMG.
Skills in Demand
Some companies, including Altria Group Inc., have promoted their CFO to CEO. The tobacco company named CFO and longtime executive William Gifford as its new CEO following the retirement of predecessor Howard Willard, who is recovering from Covid-19. Moving from CFO to CEO is common but could happen even more often now that financial skillsets are in high demand. “Especially at a time like this where things are still uncertain and the future of a company is so tied to financial resources, the CFO is probably a good choice for that CEO role,” said Doreen Remmen, CFO of the Institute of Management Accountants. “The CFO typically works right next to the CEO.”
Finance chiefs might also have better job security during the virus outbreak because of their expertise in areas like revenue and customers, the CFO Leadership Council’s McCullough said. Companies don’t seem to be holding back on hiring CFOs either, based on how many postings he’s seen lately on the council’s job board. Veteran CFOs are expected to be particularly popular as companies deal with a public health threat and economic crisis of unprecedented scale. So are softer skills like creativity, stress management, and a tolerance for ambiguity, according to Kerry Moynihan, a partner at executive search firm Boyden. “That’s going to be more top of mind for lots of companies,” Moynihan said. “Companies are reinventing their business model on the fly.”