Newswise — Washington D.C. area CFOs surveyed about economic progress in the U.S. are a little less optimistic these days. The group met in May for the 7th Strategic CFO Roundtable.

“For the May 2011 CFO Roundtable survey, the CFOs reported a decrease in optimism about the economic recovery relative to the level reported in the January 2011 survey,” says Ken Eades, Darden finance professor and area head who steered the conversations. “In contrast, results from the Duke University/CFO Magazine’s Global Business Outlook Survey, which has polled senior finance execs over the past 60 quarters, showed an uptick in optimism. The changes for both surveys, however, were relatively small and are perhaps best interpreted as reflecting a continued positive view of the economic prospects.”

Their recently released survey results served as a springboard from which various discussions arose. The gatherings are co‐sponsored by the Darden School of Business, ILEX Leadership Associates, LLC and McGuireWoods LLP.

The meeting began with updates on company performance since January. While their mood on the economy was down slightly, the CFOs reported that deals for their firms were up.

“We're not at 2007 yet, but the Mergers & Acquisitions are coming back,” said one CFO.

“The new normal (is that) everything continues to take longer, so the pipeline is full, but there just seems to be more risk in every transaction in the 30- to 90-day race to the finish line. So deals are undergoing much greater due diligence and everything's tougher and more expensive to get done,” said another.

The participants were asked about their long-range view of when U.S. jobs would rebound to pre-crisis levels. They predicted the comeback would occur after 27 months versus the 36 months they predicted at the beginning of the year. It’s a sign that the CFOs see employment progress happening sooner rather than later. The CFOs also reported advances within their own companies and expressed a belief that the momentum will continue upward.

“As the financial performance and condition of the Roundtable companies has shown consistent improvement over the seven meetings, the question becomes how the companies are planning to invest for future growth,” Eades adds. “On this dimension we saw strong indications of investment in both human and physical capital. Most companies reported an expectation of increasing headcount, spending on capital improvements, spending on new product development and several reported either strong prospects for or the completion of an acquisition.”

On the subject of headcount, the CFOs discussed how they plan to retain top talent. Some reported they were raising pay-for-performance. Others claimed to be moving away from that model and focusing only on cash compensation. CFOs of larger companies also cited cross-training opportunities as ways to retain and continually improve the skills of their existing talent. A CFO of a smaller company cited relationship-building as a way to bring in and keep talented workers.

“I've got like five or six people in my organization that I've worked with in some other capacity. The technology guys have done the exact same thing, so to help keep key talent, we’ve leveraged the portfolio of our Rolodex,” said the CFO who helped create a natural system of retention within his company.

The views gathered by the CFO Roundtable survey serve as one gauge of the economy’s progress and the health of businesses. The CFOs meet several times a year, in McLean, Virginia.

The CFO Roundtable will reconvene in September 2011.

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About the Darden School of Business:

The University of Virginia Darden School of Business is one of the world's leading business schools, offering MBA, Ph.D. and Executive Education programs. The unique Darden experience combines the case study method, the highest-ranked faculty whose research advances global managerial practice and business education, and a tight-knit learning environment to develop principled and complete leaders who are ready to make an impact.

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