Rock Star CFOs No More?

The Washington Post declares that the age of the rock star Chief Financial Officer is over.

An excerpt:

But the rise and fall of the awards mirrors a broader change in the role of the American finance chief. In the 1990s, CFOs won praise and publicity for finding creative ways to massage their companies' finances to improve the bottom line and "create shareholder value." They were lauded for their ability to invent financial instruments and for their visionary approach to mergers and acquisitions.

Nowadays, corporate boards and institutional investors are inclined to value a straight-shooter with expertise in accounting who plays more of a supporting role. While the ability to communicate with investors remains an important skill, analysts said, corporate boards are also insisting that finance chiefs focus strongly on compliance and bedrock accounting skills.

"What is important is their credibility, as opposed to their charisma," said Eisha Tierney Armstrong, managing director of the CFO Executive Board, a membership organization for top financial officers. A 2005 survey by her organization of the Fortune 1000 companies found that 45 percent of finance chiefs were certified public accountants and 70 percent had risen through the ranks of their company's finance department.

From 2000 to 2004, prosecutors indicted 27 chief financial officers on some sort of fraud charges, up from six from 1995 to 1999, according to a survey by Manu Gupta, a finance professor at Southern Illinois University. Among them was Ira H. Zar, former chief financial officer at Computer Associates International Inc. who pleaded guilty to securities fraud. Zar had shared the executive suite with the company's two top officers.