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Business Officer Magazine

Profile of a CBO

Results of NACUBO’s first-ever national survey of higher education CBOs and CFOs gives definition not only to demographics but also to job skills, mobility factors, and career aspirations.

By Lucie Lapovsky


“More intense and demanding,” said some. Changes in job scope and responsibilities as a result of the recession “are likely to be permanent,” predicted others. Such were the comments gathered in an informal poll of chief business officers conducted by Business Officer earlier this year. An article summarizing the dozens of responses (see “Words of Experience,” in the May 2010 Business Officer) provided glimpses into the ever-more-complex roles of higher education CBOs.

Adding further detail to the profile are the results of a more recent and formalized report, NACUBO's 2010 Profile of Higher Education Chief Business and Financial Officers. In January 2010, NACUBO launched the 2010 Profile, the association's first-ever national census of CBOs and chief financial officers (CFOs) at American higher education institutions. The survey project—part of the NACUBO Board of Directors 2007–10 Long-Range Strategic Plan—provides a greater understanding of the past, present, and future of college and university CFOs and the work they do every day to improve their institutions. The survey results also reveal some clues as to the ways in which the skills of CFOs will be tested even more greatly in the near future. Following is an explanation of the survey instrument as well as an analysis of some of its key findings.

Fill in the Blanks With the Full Report

To purchase your copy of the 2010 Profile of Higher Education Chief Business and Financial Officers, go to the Research page on the NACUBO Web site and click on the report cover. The profile is NACUBO's first national profile of CFOs at American higher education institutions.

The detailed report, based on survey responses provided by nearly 1,000 chief financial officers at NACUBO member and nonmember institutions, provides demographic details and other characteristics of CFOs at all types of colleges and universities in the United States. In addition, you'll find information on current areas of responsibility, plans for future career advancement, and the responsibilities most likely to occupy the CFO's time.

Cost for accessing the online document is $19 for NACUBO members and $29 for nonmembers.

Survey Methods and Responses

The results of the 2010 Profile are based on a survey sent electronically to approximately 3,000 higher education chief business and financial officers at NACUBO member and nonmember institutions. Valid responses were received from 974 CFOs, three quarters of whom were employed at NACUBO member colleges and universities. About 47 percent of the respondents were employed at small colleges and universities (private institutions with enrollment of fewer than 4,000), 22 percent at community colleges, 14 percent at public and private comprehensive/doctoral universities, and 9 percent at public research universities. The remaining 8 percent of responses came from CFOs at state system offices and other institutional types. (To purchase your copy of the survey, see sidebar, “Fill in the Blanks With the Full Report.”)

Data from the 2010 Profile draw a comprehensive picture of higher education CFOs. The “typical” CFO is a married, 55-year-old, white, non-Hispanic male with children. He has been in his current position for about seven years, and he expects to retire from his current job. CFOs also are highly educated, with nearly half having earned a master's degree in business administration and 28 percent with a master's degree in another field. About 12 percent of the study participants hold doctorates. The certified public accountant (CPA) designation is held by 38 percent of the CFOs responding to the survey.

But these averages obscure great differences among individual CFOs. About one quarter of the respondents said they have been in their current position for more than 10 years, while half have held their current position for fewer than 5 years. Fifty-five is the average age of survey participants, but 11 percent are 44 years old or younger, and 7 percent are 65 and older. While about 32 percent of the CFOs are women, it's their male counterparts who are more likely to be married (89 percent compared with 71 percent) and have children (91 percent compared with 76 percent).

These demographic differences notwithstanding, the picture that emerges when considering the comprehensive results is that of a complex position that deals with both internal and external aspects of the institution, with most CFOs viewing management of the institution's resources as their most important responsibility. Interestingly, nearly a third of survey participants indicated that part of the job is to lead and foster innovation at the institution. Yet, the jobs generally lack a natural succession sequence and specific academic credentials.

The following analysis further describes (1) the most important skills needed to effectively perform the top finance job, (2) the career mobility of higher education CFOs, (3) the duties that take the most time, and (4) the career move next on the horizon. All results are shown by the type of institution at which respondents were employed at the time of the survey.

Job Skills and Mobility

Most survey respondents agree that their jobs require talents going far beyond budgeting or accounting and that career paths are diverse.

Core competencies. Predictably, nearly all CFOs cited finance and budget as the most important skill areas needed for the position (see Table 1). However, large shares of survey participants also selected communication (60 percent) and human resources/staff management skills (43 percent) as having high importance.

READ AN ONLINE EXTRA, “Eye on the Presidency,” in Business Officer Plus for more insights from former chief business officers who now serve in the presidential role at their institutions.

The importance of different skill sets also varies by institution type. CFOs at research universities ranked communications (79 percent) and leadership development skills (44 percent) more highly, while accounting skills were ranked more important for CFOs at community colleges (30 percent) and small institutions (37 percent).

Other involvement. In addition to the typical job functions already noted, many CFOs report responsibilities related to a variety of other activities at their institutions. More than 80 percent of survey participants said they spend a “moderate” or “significant” amount of their time with their governing boards. Most CFOs staff one or more board committees, including those focused on finance, facilities, audit, and endowment.

Two thirds of respondents are in a direct or indirect reporting relationship to a board committee or board officer(s). About 68 percent of the CFOs said they spend at least a moderate amount of time with other colleges and universities on joint or consortia activities and 53 percent spend at least a moderate amount of time on government relations activities. Comparatively fewer CFOs said they devote large amounts of time to community outreach, economic development, fundraising, or alumni relations activities.

Career path. In moving to their current position, CFOs are almost equally divided in terms of the percentage that were promoted at their own institution (35 percent), recruited from another college or university (33 percent), or hired from outside higher education (32 percent). However, these results vary quite substantially by sector, as Table 2 illustrates.

CFOs at research universities, for example, were much more likely to have been promoted from within their institution (48 percent) as compared with CFOs at comprehensive universities (33 percent), small colleges (32 percent), and community colleges (33 percent). Small college CFOs (38 percent) were more likely to come from outside higher education than any of the other sectors, while CFOs at comprehensive universities (46 percent) and community colleges (37 percent) were most likely to have come from a different college or university than were CFOs in the other two constituent groups.

The survey revealed the following about the three promotion scenarios:

  • Promoted from within. Among CFOs who moved into their current position from another job at the same institution, most held previous posts of assistant or associate vice president of finance and controller; the next most common progression was from the position of director of budget.

    Again, institution types reflect significant differences: The assistant or associate vice president of finance position was the most common stepping-stone at the research and comprehensive universities, while the controller position was the previous job for most CFOs at small colleges and community colleges. This difference may be attributable in large part to the fact that the assistant or associate VP position exists primarily at larger universities. About 23 percent of the responding CFOs were promoted into the top finance spot from a variety of other positions at their institutions, including that of faculty and internal auditor, among others.
  • Recruited from another institution. For CFOs who moved to their current position from another college or university, the most common path included having been the chief business or financial officer at the previous institution (61 percent). In fact, this is the most common prior position across all types of institutions, although it is somewhat less common at community colleges than elsewhere. For most CFOs, moving between institutions involves a lateral move, although it frequently involves advancing to a larger or more complex institution. Among CFOs who came to their current position directly from another college or university, only 10 percent moved from public to private institutions and 11 percent from private to public institutions. The vast majority of CFOs came to their current position from an institution with the same institutional control as their new institution.
  • Hired from outside higher education. About 32 percent of CFOs came to their current job directly from outside the industry (see Table 3). The plurality (41 percent) of these came from business and industry, followed by government (15 percent), nonprofits (13 percent), and accounting firms (11 percent). As with many other surveyed areas, results differ significantly by type of institution. For example, government agency personnel or elected officials account for the largest number of other-sector CFOs coming to research universities, while transitioning business executives are more numerous at the three other types of institutions examined in the survey.

Time Management Challenges

When asked how they spend their time, CFOs reported significant differences related to institution type, as Table 4 indicates. Budgeting tops the list across all sectors, followed by supervision of employees and facilities (including space allocation and capital projects). Strategic planning consumes significant amounts of time for CFOs at research and comprehensive universities, but much less time for those at community colleges. At most institutions, comparatively little time is spent on entrepreneurial activities and enrollment management.

The Next Career Move

Given the age levels of the majority of the survey participants, it is not surprising to find that retirement is the most commonly cited “next career move” by current CFOs (see Table 5). More than half of the CFOs at research universities expect that they will retire from their current position, compared with 35 percent of those at the small institutions. However, almost a quarter of respondents said they don't know what their next career move will be. Of the 76 percent who did identify an anticipated move, 17 percent plan to seek another CFO position and 8 percent aspire to a presidency (see sidebar, “From CFO to President”). Eleven percent of the CFOs at both community colleges and comprehensive universities plan to seek a presidency, compared with only 4 percent of those at research universities. About 6 percent are planning to seek a position outside of higher education.

These data indicate that there will be significant turnover of CFOs in the near term, particularly at large research colleges and universities. This situation may leave some institutions with important vacancies to fill, but it may also create significant opportunities for campus leaders to create new strategies to replace their current CFOs.

More Challenges Ahead

The inaugural NACUBO national profile of top financial officers at U.S. colleges and universities brings additional understanding of the CFO position and the people who hold it. Results demonstrate that CFOs need a unique set of skills. At the same time, lingering economic uncertainty indicates that the CFO position will become even more complex in the years ahead.

As those who commented for the “Words of Experience” article noted, the current financial climate has meant more constrained financial resources for many institutions. CFOs will continue to be called upon to use available dollars more creatively to secure the future of their institutions' missions while preserving financial viability.

Some said that they've become even more intimately involved in overall strategy and operations—as innovative financial and enrollment managers, dynamic communicators, and insightful strategic planners.

Robert Lovitt, vice president for finance and operations, Lamar University, Beaumont, Texas, put it this way: “A CBO is always responsible for watching the budget and maximizing revenue generation and expense control. However, the current economic conditions have put a stronger focus on these responsibilities across the campus. It is critical that the CBO be innovative to achieve the goals that the president sets.”

LUCIE LAPOVSKY, New York City, is a consultant in higher education finance and a former college president.

From CFO to President

A number of higher education chief financial officers (CFOs) have set their sights on a college or university presidency. Business Officer asked several—who successfully made the transition to the top post—to identify the factors that motivated them to take on the challenge, their overall impressions of the job, and the advice they'd give other CFOs who aspire to be a president.

Most said that they had not originally aspired to become president; for some it was serendipity that brought it about, and for others it was the desire for greater variety and a broader span of influence.

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“As president you can implement your dreams,” says Marie McDemmond, president emerita, Norfolk State University, Norfolk, Virginia. “This is not something you can easily do from the CFO position.”

In addition, the span of influence is much greater than that of the CFO, says Kent Chabotar, president of Guilford College, Greensboro, North Carolina. The president deals with a much-wider variety of challenging issues and has a greater impact on student outcomes. Chabotar finds it quite a satisfying position, noting: “You have the ability to work the whole agenda.”

Going for It

In deciding whether to pursue a presidency, recognize, say those who've done it, that lack of a doctoral degree is often a disqualifier—even though exceptions exist. For example, Rick Hurley, president of the University of Mary Washington, Fredericksburg, Virginia, doesn't have a Ph.D. but admits he was in the right place at the right time. Hurley was promoted into the top position and notes that the ability to work with boards is critical to becoming a successful president.

Wendy Libby, president of Stetson University, DeLand, Florida, says that the most important presidential skills—which CFOs have already acquired—are communications and working with a team to develop solutions. Consequently, Chabotar recommends that CFOs aspiring to be president do their homework about the other functions that CFOs don't typically handle directly. Other advice from the CFOs-turned-presidents are to (1) teach if you have the opportunity, so that you have greater understanding and rapport with faculty, and (2) gain fundraising experience at your current institution or at a nonprofit for which you serve as a board member or volunteer chair. These experiences will help make you a more attractive candidate to a search committee.

All the presidents describe the position as one that's full of challenges but also a great opportunity to make a difference. While significant time commitments are involved, Jerry Farley, president of Washburn University, Topeka, Kansas, says he finds the job to be “enormously fun.”

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