In the changing world of university business, institutions are finding that the skills needed for their top financial jobs are more diverse than ever.
A chief financial officer's responsibilities vary from institution to institution. On some campuses he or she may have responsibilities ranging from overseeing the endowment, the physical plant, and the security office to managing auxiliary operations, human resources, and payroll. At others those duties may be divided among an endowment manager, a vice-president for administration, and a vice-president for finance.
But while institutions seek people with a sound understanding of financial affairs, that quality alone isn't enough.
Nowadays, a financial background is only the starting point, says Gary Posner, a vice-president at an executive search firm called Educational Management Network/Witt/Kieffer. C.F.O.'s manage anywhere from 15 to as many as a thousand individuals at some universities, so they have to be good leaders and team players. "They can no longer operate within a little silo," he says.
It's essential that financial officers be able to lead and motivate, says Mr. Posner. In the past "if you were a good C.P.A. or M.B.A. and could do the work, that was more than sufficient to be a chief financial officer. But today one has to be a member of a senior team -- which includes the cabinet and the president -- and have some sense of where the institution is going as a whole."
As a result, says Mr. Posner, it's hard to find good C.F.O.'s. The problem, he says, is that the people who work their way up through a university's financial or accounting ranks aren't necessarily exposed to the big picture.
"You're very specialized and, even when you become something like a comptroller, you're still pretty narrowly focused in terms of what a comptroller does," he says. "Then, all of a sudden, as the vice-president for finance, you have all these other functions reporting to you. Unless you've had some exposure to them in your career, it's a difficult leap to go from being strictly the finance person to being the chief financial officer."
Where does one acquire the skills for the job? There is no single career path, says Larry Goldstein, senior vice-president of the National Association of College and University Business Officers. A chief financial officer may be a C.P.A. or have an M.B.A. or a master's or doctoral degree in educational administration and finance.
The degree is less important than hands-on experience and a solid track record, he adds. Successful C.F.O.'s generally have 7 to 10 years of senior-level management experience, regardless of whether they started in accounting, institutional planning, or some other sector.
A successful C.F.O. has to be a good communicator, says Scott Malpass, vice-president for finance and chief investment officer at the University of Notre Dame. In today's climate of accountability, chief financial officers work closely with boards, presidents, and constituents who want to know what the C.F.O. is doing and why.
Mr. Posner agrees that C.F.O.'s must be good ambassadors. "But those skills do not come naturally to finance people," he says.
Despite a growing concern with the bottom line, many universities still prefer to hire people who've worked in higher education, says Robert Walton, Jr., vice-chancellor for business affairs at the University of North Carolina at Wilmington. It's important for a new C.F.O. to hit the ground running, so institutions are reluctant to hire people from the corporate world who may need time to grow into the job.
Even so, as universities become more businesslike, some institutions are turning to professionals from financial companies, says Mr. Goldstein. At such universities, he says, "there's an assumption that the complexity of the business environment is a bigger issue than knowledge of the higher-education industry." This practice is more common at private universities than at public institutions -- which are more subject to state regulations and priorities -- but it's not the norm.
Endowment or investment managers at universities with large endowments are more likely to come from private industry, says Mr. Malpass, who himself worked on Wall Street as manager of structured investments and assistant treasurer for the Irving Trust Company. There's a demand at universities for knowledgeable investment managers, he says, pointing out that small shifts in investment performance can make a big difference when you're dealing with a million-dollar endowment.
Investment managers must understand many kinds of investments, adds William Spitz, treasurer at Vanderbilt University. "Fifteen years ago endowments were invested in U.S. stocks and bonds," he notes, "but today they're invested not only in U.S. stocks and bonds, but in foreign stocks, emerging-market stocks, real estate, venture capital, timber, energy, and so on, so it's much more complex."
In some ways, says Mr. Posner, "investment managers are easier to attract than chief financial officers, because there's a very narrow specialty area there. You know exactly what it is you're looking for, whereas the C.F.O. has to be a strategic planner and thinker and deliverer all at once."
