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How CFOs Can Foster an Effective Partnership with Their CEOs

The partnership between a CFO and CEO has the ability to lead an organization through times of transition, like we are in today, into a period of growth or cause it to sink into stagnancy.

This blog explores what a CEO needs from their CFO in order to effectively guide their company.

The relationship between the CEO and the CFO is arguably the most important partnership to an organization. If the relationship is effective, the organization has two strong leaders capable of navigating it through times of transition, like we are in today, to be positioned for propelling it forward into a period of stable growth and opportunity. If ineffective, the organization could grow stagnant and quickly lose its competitiveness—hindering its place in the market.

This prompts a question: how can a CFO take the lead in facilitating a strong partnership with their CEO?

Be An Effective Communicator

CEOs need a CFO that has the ability to be open and can be trusted to bring tough issues to the table. In a CEO magazine survey of over 100,000 executives, 89% of respondents said the leadership trait they valued most was honesty. Additionally, 98% of CFOs that labeled the relationship with their CEO as “very strong” said they were extremely comfortable discussing difficult issues. While presenting as a united partnership in public is important, the relationship between CEO and CFO in private must be honest, even when the discussion doesn’t center around favorable topics.

“In public-facing relationships, for example with shareholders, the CEO is the boss.” John Duffy, CEO of Finsbury Food Group explained. “But on a one-on-one basis, the CEO and the CFO need to afford each other the opportunity to speak openly. A CEO must know what a CFO really thinks about budgets and strategy and this dialogue should take place with complete openness.”

Additionally, the CFO must help the CEO prioritize issues effectively. An important aspect of this unique C-Suite partnership is the capability of a CFO to help the CEO pivot quickly if needed and focus on the right challenges and opportunities for the time.

Embrace Strategic Planning

When strategy is developed, it is the CFO’s duty to forecast risks within that plan and ask critical questions about dominant growth constraints, uncertainties and risks, and the assumptions that underly the strategy. The CFO also has a crucial role in managing their F&A organization so that the entire company sees the finance department as credible, as well as providing valuable financial reporting to support strategy development. When the finance team is fully functional and actively supplying accurate, business-critical insights, the CFO has more time to brainstorm strategy with the CEO and other C-Suite leaders.

Versatility is Key

The modern mentality that the CFO is not simply a “number cruncher” cannot be emphasized enough. The CEO, as well as the entire organization, expects today’s CFO to contribute to strategic matters across the business. But in order to effectively strategize, the CFO must be well versed in areas beyond finance and contribute to matters that encompass the entirety of the organization. A CEO needs their CFO to run alongside them and understand the business as much as they do to serve as an effective sounding board for widespread changes and opportunities. To accomplish this, CFOs must form tight, communicative relationships with C-Suite executives such as the Chief Technology Officer (CTO), Chief Information Officer (CIO) and the Chief Revenue Officer (CRO).

Drive Change Opportunities

In a Deloitte article, Charles Holley, retired CFO of Walmart, states that “organizations develop a lot of antibodies to change.” It is the CFO’s job to ensure that the CEO’s mindset does not become static and render the company stagnant. CFOs should be constantly looking ahead and evaluating change opportunities with the potential for ROI. Technology opportunities, especially where financial automation is concerned, have the ability to produce a high ROI that can provide additional growth opportunities across the organization.

Omar Choucair, CFO of Trintech, emphasized the importance of digital transformation in a recent interview. “Demonstrate how, after conversion, the company is more competitive.” Choucair advised his CFO audience, “You can easily show how, whether there’s four or five companies in the competitive set, if [the company] moved quickly in the transformation process, [they] can either meet or leapfrog to where [their] competitors are.”

The CFO is critical to any organization and especially important to the CEO. In order for the CEO-CFO relationship to be as effective as possible, the CFO needs to be prepared for the future, particularly when it comes to technology and financial automation. To learn more about the future of finance, read The CFO’s Guide to RPA.

Written by: Ashton Mathai