Qualities of business leaders Featured

8:00pm EDT July 26, 2007

Good old-fashioned honesty continues to be a highly coveted trait for leaders in corporate America. According to 31 percent of chief financial officers polled in a recent survey, integrity is the most important quality for a business leader to possess, followed closely by experience and communication skills.

The survey, developed by Robert Half Management Resources, the world’s premier provider of senior-level accounting and finance professionals on a project and interim basis, was conducted by an independent research firm and includes responses from 1,400 CFOs from a random sample of U.S. companies with 20 or more employees.

“Integrity — in both managing assets and managing people — has always been important in business,” says Cecil Gregg, president of the Southwest District of Robert Half International. “But in today’s environment, it is not only important for a CFO to be honest, he or she also must able to communicate that integrity.”

Smart Business spoke with Gregg about the importance of the interrelationship of integrity and communication skills.

Why is it important to not only be honest but be able to communicate integrity?

The corporate scandals of the recent past have underscored the need for sound corporate practices and transparency in financial reporting. Financial executives must have not only the technical expertise and knowledge to do this correctly, but they also must be able to effectively communicate complex concepts to other people from many walks of life — from investors to board members and the general public — in language that everyone can understand. Communicating openly is the key to motivating and inspiring people, as well as fostering trust.

Many of the CFOs who have risen through the ranks have excellent communication skills, and frankly, those that have experience and integrity are much better positioned if they are able to communicate openly to others. For those assuming the CFO role, it has become a prerequisite that these leaders are competent interacting externally with investors, analysts and the media, as well as internally with key leaders and staff.

Employees also look to their leaders to practice what they preach. Anyone can say the right thing, but an honest leader’s actions back it up.

How can the lack of communication hurt a CFO’s perceived integrity?

Without frequent communication, honest actions can sometimes be perceived as dishonest — either by employees or by outsiders looking in. Actions may be misrep-resented or misunderstood if they are not openly discussed.

For example, take the scenario of a corporate buyout when decisions need to be made about the acquired company’s leadership. Evaluations about the acquired company’s employees are usually made behind the scenes — and naturally, should never be discussed or publicized. But there are two sides to every story, and those that are shut out of the buyout most likely will not have positive things to say. Before that happens, however, good leaders with integrity will come forth and explain why key leadership moves were made or not made. It takes a leader with strong integrity, experience and communication skills to walk that fine line of explaining reasons without damaging anyone’s reputation and sharing the wisdom of the decision made to key stakeholders.

The key is to keep communication open and decision-making transparent, because in the long run, the more insiders and outsiders know about how a company operates, the more comfortable people feel about the integrity of its leaders.

It sounds like the role of the CFO has become more complex over the years.

The CFO’s job has definitely become more demanding, particularly with the Sarbanes-Oxley Act and more complex financial reporting requirements. CFOs also have more paperwork and administrative duties than in the past. At the same time, the demand to communicate this information is intense. CFOs need to understand more deeply and feel comfortable that their company is operating in full and transparent disclosure.

What are companies doing to effectively groom accounting professionals to assume today’s CFO roles?

Offering a mentoring program is certainly an effective way to do this. Many firms have implemented or enhanced their ethics training for employees. Those fresh from colleges and business schools are more aware of ethics because of the corporate scandals. Some companies are also assisting professionals with tuition reimbursement for CPA or MBA degrees, as well as attaining professional certifications.

CECIL GREGG is president of the Southwest District of Robert Half International, and is based in Houston. Reach him at (281) 296-2812 or by e-mail at Cecil.gregg@rhi.com. A division of Robert Half International, Robert Half Management Resources has more than 140 offices throughout North America, Europe and the Asia-Pacific region, and offers online job search services at www.roberthalfmr.com.