Why does CFO resign?

Jiutian announces resignation of its Chief Financial Officer:
http://info.sgx.com/webcorannc.nsf/ef3ba6cb188613ea482571b2003641d3/9343cc1eb0229f384825735200344249?OpenDocument

What I have to say below is not specifically directed to this particular announcement but my personal opinion of how people react to the announcement of this nature.

Whenever CFO or any key personnel in any organisations resigns, it always raises a few eyebrows. You need not look far. Recently there were rumours that Labroy Marine's Technical Director was leaving and the share price plummeted more than 10% on the day.

There are 2 school of thoughts to this kind of announcement:

1. Positive: The CFO leaves on his own accord to pursue his own interests (usually quoted as such)
2. Negative: The CFO is "forced" to resign because he knows something that the profession requires him to quit.

The first one is more straight forward. People do resign because they need to take a break to pursue other interests or careers. The current position maybe too stressful or he is not well rewarded. Other undisclosed reasons include the capability of the CFO to discharge the duties required of him. Maybe he refuses to travel or cannot cope with different culture and languages in a foreign country. Whatever it might be, this is good for shareholders because we all do not want a CFO who cant do the job and that it would only be bad for the company to keep him.

The second one is more tricky. It can sometime send the company's share price tumbling because the public perceives the management is up to no good and the CFO is compelled to leave. No kidding. We accountants are taught to leave a job, however well paid a job maybe, if we discover something or when we find ourselves in a situation where our professional ethics might be compromised.

In this modern world, CFO is the right-hand man of the CEO. Usually he is the first to know if anything is not proper. Because of the privileges we accountants enjoy, we also carry the same weight of responsibilities as those of a company director. Its not hard to find cases where CFOs or Finance Directors of commercial and charitable organisations convicted on criminal charges together with the number one man at the helm.

Maybe SGX should consider making the CFO to disclose the "real" reason for leaving the company, just like what is going to be required by directors soon. That would make the announcement more transparent and it could minimise the damage that it might cause to the company.

China and India are reported to be short of qualified accountants. Indeed, qualified accountants with technical and good soft skills are hard to come by. Good accountants are not just good at interpreting accounting standards or reading financial statements. What is equally important is his ability to understand the business operations and be able to deal and connect to different group of people and personnel in the organisations. This is what I call the soft skills.

Accountants are generally not good at expressing themselves, myself included. I have been to AGMs and I have seen how accountants are grilled by shareholders and the CEO or directors have to shield him from further embarrassment due to the lack of understanding of the business the company is in or the general knowledge of the industry.

As an accountant, I make no excuse for myself. Ever since I quit my audit profession to join the commercial world, i have to constantly remind myself to learn the business skills as much as keeping myself abreast with the latest corporate developments. I always force myself to understand the various aspects of the business operations. My boss always get me involved in key decision making as he feels that I am in the best position to evaluate any course of action. At the end of the day, the management decision must take into account dollars and sense because that's how the management is being measured by shareholders.

For those accountant wannabe, please ensure you acquire the relevant technical skills, after that the soft skills will get you far. Good luck!