CFO ≠ CEO
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
As someone who tries to stay close to current trends and developments within the finance function, all chatter in the past years has been around the on-going development, some would say evolution, of the CFO role. Everything from the CFO becoming redundant or swallowed by the COO role to the CFO becoming the Chief Everything Officer making the CEO redundant. The chatter specifically revolves around how the CFO can become more strategic and drive the business towards a brighter future. In addition, the finance function is also becoming more strategic with the emergence of finance business partners in most companies. So, is the CFO and the finance team taking over the company?
Hold your horses said the CEO
To really answer that question we first need to look at what the CEO actually does in a company and how that compares to the new look CFO role. Below is a short list of some the typical CEO tasks.
- Setting the direction of the company
- Decides on budgets for all departments
- Drive the culture of the company
- Manages senior managers
- Generates and approve new business and projects
- Attend board meetings
Most likely you could add a whole range of other activities that a CEO would do, however, the purpose is not to make an extensive list but rather to look at how the CFO stands compared to some of the typical CEO tasks.
It’s clear that in all areas the CEO has the ultimate responsibility for what goes on in the company. Maybe that’s stating the obvious but in relation to the CFO who prepares material for and support the CEO that’s the clearest difference. Words associated with the CEO here are Set, Decide, Drive, Manage, Generate, Attend whereas the associated words for the CFO are Support, Prepare, Implement, Manage. The CEO will have a hard time running the company well without a good CFO or good members of the executive team in general. If the CFO fails to deliver solid budget inputs, makes mistakes in the board material etc. the CEO will make bad decisions and lose respect.
Finance, the ultimate support function
So the CFO is not the CEO nor should (s)he strive to be. Instead, the need is for the CFO and the finance function, in general, to deliver second to none support to the CEO and the rest of the executive team. This will increase the likelihood of good decisions being made all around. Finance will not run the company, not now and more likely than not neither in the future. Finance is a support function that facilitates decision making in the company but it’s the CEO that has the responsibility for the decisions.
Did you think the lines between CEO and CFO were becoming blurry or was this simply a phantom dreamed up by ambitious finance people? The CFO and the finance function still has a lot of ground to cover to provide even better support to the CEO and the rest of the company. Finance is transforming fast though and has taken many steps in the right direction. If you want more tips on how to continue the finance transformation journey there’s more help below. Before you continue to read though let me know what you think of my latest post? Like, share and comment to get the discussion going!
For previous articles about the development of the CFO position and finance transformation please see below.
There Is A New Kind Of CFO Needed In Town
Finance Transformation Should Be All About... People
Why We Need Business Partnering Transformation
The Skills Of A Finance Business Partner
Introducing The Finance Transformation Nine Box
How Finance Can Help When Business Is Bad
Why Accountants Are An Endangered Species
How Finance Can Become An Analytical Powerhouse
What Finance Business Partnering Really Is
You’re A Finance Business Partner, Now What?
Anders Liu-Lindberg is the Regional Finance Business Partner for Maersk Line North Europe and is working with the transformation of Finance and business on a daily basis. Anders has participated in several transformation processes amongst others helping Maersk Drilling to go Beyond Budgeting and transformed a finance team from Bean-counters to Business Partners. He would love the chance to collaborate with you on your own transformation processes to help you stay out of disruption. If you are looking for more advice on how to get the most of LinkedIn Anders also has a few tips to share as well as if you want help in your job search. Don’t be shy! Let’s get in touch and start helping each other.
Revenue Growth Management Manager CMI - Restaurants & Retail
5 年A CEO main responsibility is the overall success of a business, that incluedes setting the company culture, the vision and strategies among others. In the other hand the CFO main priority are the financial actions of the business, the CFO is the most reliable adviser but is not the final decision maker, and the CEO most also work in hand with MKT, RH, R&D, etc. A CFO can become a CEO, but the important point here is that a CEO is not a CFO, and both of them are necessary and extremely important to the success of an organization.
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8 年What is your take on multinationals setting up operations outside of their HQ country and taking an executive staff from the newly added location, but sending over a finance guy from home base?
Award-Winning Marketing Leader | Oracle
8 年"Did you think the lines between CEO and CFO were becoming blurry?" Not blurry; more like, sequential. Tom Kolder of Crist | Kolder Associates recently spoke at one of our events, and in the vast majority of CFO searches his firm conducts, the board is looking for a CFO who can eventually be a successor - who can slide easily into the CEO chair when the current boss moves on.
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8 年Sorry I missed this yesterday Anders Liu-Lindberg.LinkedIn didn't notify me but I found it because someone else on my feed shared it.of course what the C-suite really needs is a great CHRO to keep the CEO and CFO in check.