Darden School Convenes Company CFOS and Takes Pulse of the Economy

“The country is going through a healing process. I’m not certain how long that will take. My mantra is we have a lost half decade. The alternative is a lost decade. Right now it feels like we are in the fifth or sixth inning, if Europe doesn’t make us do a double header,” said Gary Perlin, CFO of Capital One Financial Corporation, the fifth largest bank in the U.S.

Perlin and his colleagues Victoria Harker, CFO and president of Global Business Services for AES Corporation, and Thomas Kennedy, executive vice president and CFO of Hilton Worldwide, gathered in February at the University of Virginia Darden School of Business to discuss their roles as CFOs and to give their views on the economy. Paul Tudor Jones Research Professor of Business Administration Kenneth M. Eades moderated the roundtable discussion as part of the Darden Leadership Speaker Series.

On the state of business inside Capital One, Perlin cited greater efficiencies, opportunities in merger and acquisition activity and good credit. On the other hand, he acknowledged that his firm is operating in a growth-challenged environment.

“Housing prices need to feel firmer around the country,” he said.

Mergers and acquisitions played a pivotal role in the growth of AES, according to Harker. She reported that the company is growing financially and is seeing improvement in operating efficiencies.

“Our growth is focused on core markets and private equity buys the companies that we spin off,” said Harker.

Kennedy said that the hospitality industry is climbing out of the recession along with the rest of the country. Hilton Worldwide, the privately held hospitality firm headquartered in Northern Virginia, is growing in hotel occupancy and pricing.

“Rates drive profitability,” he reported.

The group also included talk of CEO and CFO relations and risk taking.

Perlin said the ideal relationship between a CEO and a CFO is supportive in public and aggressive in private. He also believes CEOs must harmonize their strategies with those of their investors.

“The voices of shareholders are the star roles at play,” he said.

The CFOs’ visit was an offshoot of the ninth Strategic CFO Roundtable held at McGuire Woods in McLean, Virginia, earlier this year. Three times per year, CFOs representing multiple industries and companies complete surveys about the state of the economy and the health and hiring efforts of their firms and discuss the results. Eades facilitates the McLean, Virginia, talks as well. At the January 2012 roundtable, the CFOs reported an improved sentiment about their companies, which was fueled by an increase in bank lending and cash balances that created a favorable environment for merger and acquisition activity.

Co-sponsors for the ninth Strategic CFO Roundtable include Darden, ILEX Leadership Associates, LLC and McGuire Woods, LLP.
Overall, the news is positive from participating Strategic CFO Roundtable companies and those seeking to work for them.