You’re used to reading about companies farming out everything from call center to IT jobs.
Well, subcontracting has reached the executive suite, too.
Companies these days are renting CFOs — generally thought of as the third-most critical job in corporate America next to the CEO and COO.
But isn’t the chief financial officer too essential a role to farm out?
Not if Atlanta-based Tatum’s $86 million in annual revenue is a guide.
With 352 experienced CFOs on its roster, Tatum provides interim execs to companies that are often in the middle of a crisis or major event. It could be a bankruptcy filing or restatement of earnings. It could be an acquisition. Often, the prior CFO has abruptly departed — not necessarily by choice. Permanently replacing that CFO can take six months or longer.
So companies can need “short-term firepower” to get them through a difficult period, said Karen Macleod, hired as Tatum’s president only six weeks ago.
Tatum provides CFOs who “hit the ground running,” she said. To become part of Tatum, execs need a minimum of 15 years of financial experience, including five years as a CFO of a firm with at least $50 million in revenue.
We’re not talking about retired CFOs here. We’re talking about veterans looking for something new to do.
“We all like to be challenged,” said Charles Dunlap, now on his fifth CFO gig for Tatum. Prior to signing up, Dunlap, 53, worked directly for real estate, financial services and manufacturing firms for about 20 years.
Many of the challenges thrown Tatum’s way come from private equity firms. Often after purchasing a troubled small or mid-sized company, the private equity firm needs an experienced CFO to start turning things around while it looks for a permanent one. With a limited time horizon — private equity leaders often want to fix and resell a firm in three to five years — a temporary CFO can sometimes become permanent.
“Interim can be long-term,” Macleod, 47, said. Tatum CFOs have been on one assignment for as long as six years.
Crises aren’t the only reason companies hire interim CFOs. Sometimes the execs are called on to mentor new CFOs who need more seasoning, Macleod said. Other times, they may work alongside an internal CFO to help on a major project.
In addition to experience, Macleod said, there can be another advantage to hiring an interim CFO.
“We don’t have to be political,” she said. That means a firm’s chief executive officer can get an objective analysis from someone not interested in scoring Brownie points with the top boss.
At the same time, however, the interim CFO has to be a quick study of the company’s internal dynamics.
“It has to be a good cultural fit,” Macleod said. “Even if they’re a change agent, you have to do so effectively.”
While Macleod is leading Tatum, her background is in accounting and auditing, not as a CFO.
“I’ve worked with CFOs my entire career,” she said.
If Macleod is successful building the business — bought last year by SFN Group for $46 million — she’ll be doing a lot more of it.
- Henry Unger, The Biz Beat
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