CERTIFICATES TO GO
For all its whiz-bang capability running back offices for multinationals, cash management in India remains a largely paper-based affair.
By Abe De Ramos

“Many people cannot take time to study after work,” sighs Xu Ming, the director of finance and administration at Zim Integrated Shipping Services (China), a wholly-owned Israeli company that invests in container shipping. “However, studying after work really makes a difference,” he adds. So, at least, Xu hopes. Like many young Chinese finance professionals, he seems hellbent on earning as many certifications
from professional bodies as possible.

Xu passed the CICPA (Chinese Institute of Certified Public Accountants) exam while still working at accounting firm PricewaterhouseCoopers (PWC) in 1995. At the end of 2002, he started studying the CFA (Chartered Financial Analyst) course. Now he’s passed CFA levels one and two and is working towards the final and most difficult level three. Unsatisfied, the energetic Xu also enrolled in the EMBA program at Beijing’s Cheung Kong Graduate School of Business. “I am thinking that after finishing the EMBA program next year, I should start learning something else,” says Xu.

So many learning options, so little time. Now that so many foreign companies are well established in the People’s Republic, local finance professionals are keenly aware of the huge gap between business standards in China and those in North America, Europe and Australia. With the coming of numerous certificate programs, such as ACCA (Association of Chartered Certified Accountants), CIMA (Chartered Institute of Management Accountants), and CMA (Certified Management Accountant), finance professionals are working harder than ever to enhance their professional knowledge. But how helpful are these certificates in real work situations and for a Chinese CFO’s career development? The answer is that they are increasingly necessary to climb the finance ladder. But on-the-job experience is still considered the gold standard, with or without certificates. Amid a shortage of qualified staff in China, employers are looking for hands-on knowledge most of all.

Studying as a Habit

Alongside his title of CFO of Beijing Jin Ao Gang Group, on Song Changwei’s name card there are also titles such as CPA, ACCA, PNA (Professional National Accountant), and AFA (American Finance Association). “After more than ten years of working, and moving up the ladder from finance manager to CFO, I became more aware of my lack of knowledge and the need to acquire new skills,” says Song. Jin Ao Gang Group is a private company with diversified businesses in steel, mining, and real estate. “I chose to continue studying while working”, he says, “because business and transactions in the company have become more complex with globalization. The role of finance professionals has shifted from the traditional functions in accounting, auditing, and fund management to shaping strategy, investor relations, and preservation of value. With such a shift comes the need for CFOs to acquire new knowledge sets and ideas. They also need to change their management style.”

For the PNA in particular, Song says that having the certificate qualifies him to apply for immigration to Australia, a safe exit strategy many professionals in China would consider. “It was the first exam I took and passed because I planned to emigrate to Australia,” he explains. “But I decided to stay because of the soaring Chinese economy.”

Song is taking CFA courses, not to pass the CFA exams, but to update his knowledge and skills. “Now we need to use more of a variety of finance tools,” he says. “We hope to grow our business through finance.”

If Song approaches learning in a practical way, Lu Ping, who has just quit his job as finance controller of a foreign leasing firm, seems insatiable for knowledge and skills and continues to study mainly out of curiosity.

Lu passed the CICPA, ACCA, CISA (Certified Information System Auditor), and CFA exams after graduating from college in 1993. He worked as a manager in PWC before joining Arthur Andersen in 2000, only to return to PWC after Arthur Andersen collapsed over the Enron scandal in 2002. It was then that he seriously considered taking CFA courses.

“I had concerns,” says Lu. “I asked myself whether I took too many courses and [give] the impression that I’m only good at passing exams but not good at work.” Lu decided to take the CFA exam anyway. “I always judge whether the new course will offer new skills. I asked a Hong Kong friend who passed both the CPA and CFA for advice. He said that one could still learn a lot from CFA courses even if he already holds a CFA because CPAs see things from an accountants’ point of view whereas CFAs see things from an analyst’s angle.”

What makes Lu exceptional is that, aside from a Master’s in Finance degree, he also earned a Master’s degree in software engineering, and holds the title of senior software engineer. “IT is a hobby for me,” he explains. Yet understanding IT systems can be an important part of the CFO’s job. “To a finance professional, learning about information systems such as ERP can sometimes be an advantage. I wrote a small auditing program when I was in PWC and it worked quite well.” he says.
Xu Ming’s view on continuing study is more representative. “I see studying as a way to motivate myself. Those at the top (of management) sometimes fail to learn new things and to spend time thinking over serious issues systematically. Continuing study and taking exams will help keep the motivation and also systemize your knowledge and skills. To me, reading and studying are also good pastimes,” he says, holding a thick textbook on his desk. “I’ve been reading this book on statistics and found it very intriguing. It also helps a lot with my work.”

Reading vs Practicing

“When faced with similar problems in work, if you have systematic knowledge and skills it’s much easier to adapt them in solving problems,” says Song. In eight years Song has turned into a seasoned CFO from a fresh college graduate, moving from state-owned enterprises to Hong Kong-listed firms. His management style changed along the way. Continuing study played a big role in his career progress.

Xu Ming also found that what he learned from courses helped in practice. When he first joined Zim as finance chief, the company was still a representative office. “Before we only had about 220-square-meters of office space; now we have 2,200 square meters. Before we had only a couple of staff; now we have several hundred. That doesn’t include well over a thousand workers at our joint-venture subsidiaries,” Xu says. Though still holding the same title, the rapid growth of Zim’s business changed Xu’s role as finance and administration director. “Before, I was more often involved with day-to-day accounting and fund management. Now I have to spend a lot of effort on strategy and investment decisions,” he says. “When evaluating a project, especially investing in an industry that I am not familiar with, what I learned in CFA courses provided very useful tools.”

In addition to practical use, does having professional certificates improve a Chinese CFO’s career prospects? Lu, for one, isn’t convinced that they helped his career. In 2003, Lu left PWC again to join the internal auditing department of a Hong Kong-listed company that was part of the conglomerate Chia Tai Group. A year later, he was rotated to be finance controller of a subsidiary leasing firm because of internal restructuring. But Lu was on the move again after eight months because he didn’t want to be trapped in such a small company.

Job hunting was not as smooth as he expected it to be. “A headhunter once told me that companies will look at my capabilities, not my certificates. His advice was: do not boast of your certificates; people will feel that you are simply a ‘bookworm’.”

Not all headhunters see things that way. Yi Wei, partner at Sunshine Consulting in Shanghai, regards some certificates as key criteria in getting the CFO job. “Professional certificates are important,” he says. “For example, without a CICPA, we won’t consider a candidate for the CFO job in a domestic firm.” David Yeung, a Beijing-based partner at Heidrick & Struggles, a headhunter for senior executives, agrees. “Without professional certificates we might not find a candidate qualified, even if he majored in finance and had worked for a few years as a CFO.” He adds: “Some companies found accounting certificates too technical in the past. They thought that accountants didn’t understand management, so they favored MBAs for the CFO’s role. Now with Sarbanes-Oxley, internal control has become more important. Professional certificates are again gaining favor.”

These comments may bring some relief to Lu. However, functional experience is equally important. According to Yeung, many domestic companies in China expect CFO candidates to have financing networks to raise funds. Those that plan to get listed require a CFO with experience in IPOs. Song Changwei’s second job was as finance manager at a company listed on the Hong Kong Growth Enterprise Market. The company was still preparing for the IPO when he joined, so finance, investment, and assistance for the IPO fell into his portfolio, which gave him valuable exposure. Now at Jin Ao Gang Group, preparing for a listing is still one of his main duties.

If practical experience is weighted against professional certificates, experience still has the upper hand. “Many college students have taken courses and exams to earn certificates,” said Song. “However, even if you passed the exam, it doesn’t mean you will make a good finance manager.”

“[Certificates are] only a plus,” says Song. “The core competency is business experience; certificates play only a supporting role.”