How does the Chief Financial Officer support the Chief Executive Officer?
Since the role of the CFO has gained increasing importance, the relationship between the holder of this role and the CEO is shifting to one of partnership. Building a strong relationship between the CFO and the CEO is crucial to the success of any organization.
The question is how and especially what does a CEO want from a CFO? Here are some key steps a CFO can take to support a CEO.
Foster mutual trust and respect
Trust and respect are the foundation of any strong relationship. Both the CFO and the CEO must demonstrate trust and respect for each other’s expertise, judgment, and decision-making capabilities.
Individually and together, they must support a culture of transparency and integrity where all team members feel comfortable sharing their perspectives and challenging each other constructively.
A massive 98% of CFOs who say they have “very strong” relationships with the CEO say they feel comfortable bringing up difficult issues. Without trust, it will be difficult for a CFO to build a solid relationship with the CEO or anyone else.
In an environment of support, integrity and trust, when someone makes a mistake they are encouraged to have an honest discussion and own up to the mistake in order to correct it. Such a CFO is prepared to go beyond what he has committed to and builds the foundation of trust between himself and the CEO.
Establish open communication
Effective communication is essential to a strong relationship. A CFO who understands these issues encourages open and frequent communication with the CEO, ensuring that both share data, ideas, concerns and provide feedback.
Regularly scheduled meetings give the CEO and CFO the opportunity to discuss important matters. That is precisely why 89% of CFOs answered in a survey carried out by Valoria that the leadership trait they appreciate the most is honesty. This means always being in direct and transparent communication with the CEO and other colleagues.
In any company large or small it is important that the CFO can communicate complex issues in simple terms, and always strive to maintain an open and honest dialogue.
Know the business model and the market
CFOs must have a thorough understanding of the company’s operations and strategy. They must be familiar with how each department of the company works. To understand where the company is headed and how the management team intends to get there.
Managers appreciate CFOs who are familiar with how the company’s various departments work in addition to managing the company’s data and financials, especially how each of their plans fits into the company’s larger goals.
Building trusting relationships with other team members is essential so that the CFO can learn about the company’s potential, expansion plans, or challenges that stand in the way of achieving goals.
It questions the status quo and facilitates change
The CEO doesn’t expect the CFO to be a dutiful follower of the current situation, but instead expects the CFO to speak up and support the company’s progress toward a more profitable future. For example, if the data does not support a particular plan, consider alternative approaches. The CFO is often responsible for analyzing alternative scenarios within a business, be it investments or financial management.
One area of the organization where the CFO can influence positive change is the use of new technology to improve procedures and increase the productivity of colleagues in the department he leads. CFOs must be prepared to implement new technologies as automation and technology are always advancing.
Become a trusted partner in decision-making
The Chief Executive Officer (CEO) needs the Chief Financial Officer (CFO) as a strategic partner in managing the business and an advisor when making important decisions. A CFO’s highest priority will be maximizing business performance. The CEO will assess the CFO’s potential as a strategic business partner.
How can a CFO convince the CEO that he is more than capable of rising to the occasion? They focus on strategy and numbers, coming up with solutions to automate routine tasks, do strategic planning, cultivate and express their leadership skills. Supports the professional growth of employees by providing training, coaching and mentoring opportunities.
Building a strong relationship between the CFO and CEO takes time and effort. Both must commit to fostering an environment of collaboration and trust. By following these steps, the CFO lays the foundation for a successful partnership with the CEO that drives the company’s growth and success.
Alina Făniță este CEO și Partener al PKF Finconta. A lucrat cu companii multinaționale sau firme antreprenoriale din domenii diverse de activitate, pentru a le oferi servicii de audit financiar, due diligence, restructurări de grupuri, audit intern și alte servicii conexe activității de control intern. Este membră a celor mai prestigioase asociații profesionale din domeniu: ACCA (Association of Chartered Certified Accountants), CECCAR (Corpul Experților Contabili și Contabililior Autorizați din România), CAFR (Camera Auditorilor Financiari) și IIA (Institute of Internal Auditors). A absolvit EMBA Asebuss la Kennesaw State University, a fost trainer pentru cursuri IFRS și este invitată ca expert la numeroase conferințe de business. alina.fanita@pkffinconta.ro
