The many hats of a CFO

I was at the FEI (Financial Executives International) conference in Niagara Falls a few weeks ago. There was great content for a couple of days, but one of the best sessions was the keynote speech by Maureen Sabia, who is chairman of the Canadian Tire board of directors. He has enjoyed many years serving on the boards of directors of public companies and is very clear about what he expects from a CFO. With her experience, knowledge and confidence she was not willing to argue, and she was very convincing with her views.

For many people, the CFO is “the chartered accountant,” and there is a stereotypical expectation that he will be a bit “straight,” not necessarily outgoing, a bit risk averse, a bit nerdy, and a bit unsocial. Many accountants will play with that stereotype, but my experience with top financial executives and especially those at the highest levels is that they are nothing like those stereotypes.

http://vasutioc.com

Here’s what Maureen Sabia had to say about CFOs.

1. 1. The basic expectation of a CFO is that they know the technical aspects of their cold work. Good with numbers, good with understanding the nuances of numbers and able to report efficiently and accurately.

1. 1. The CFO is expected to offer no surprises to those who rely on her to provide information. The board and the other executives of the company must have absolute confidence that she will not stop.

1. 1. Board members and most importantly the audit committee should expect to meet with the chief financial officer prior to any board meeting, and should expect to hear anything they need to know before going to the board meeting. (see # 2).

1. 1. The CFO must cultivate relationships beyond her domain … with other executives, board members, industry members, and peers.

1. 1. Maureen spoke about the 4 different roles that the CFO will have … The Strategist, the Catalyst, the Guardian and the Operator.

1. 1. The strategist. In this role, the CFO applies his financial leadership in M&A situations, capital markets, financing, and in aligning financial strategies with business strategies. The CFO must have an excellent understanding of the business, so much so that a previous position with business management responsibilities is extremely valuable.

1. 1. The catalyst. The CFO will share leadership responsibilities with the CEO, ensuring the disciplined execution of corporate strategy (along with the rest of the executive team). The CFO will bring rigor to business processes, change management skills, and a good understanding of the risks inherent in business strategy.

1. 1. The Guardian. The CFO will protect the assets of the company, bringing the right balance of risk to the growth strategy. She won’t shy away from challenging the CEO, bringing healthy tension to the executive suite by ensuring that the CEO isn’t surrounded by “men who are.” The CFO must have the trust of the executive and the board, which is achieved through openness, honesty and its strategic value for the organization.

1. 1. The operator. The CFO will bring the right talent to her team, delegate, and mentor to ensure she has time to perform all expected roles. The CFO is expected to be proficient in this part of the job … numbers must be reported extremely accurately, completely and efficiently.

1. Permanence is important … when a company has a great CFO, it needs to maintain it, ensuring continuity and reducing the risks inherent in turnover.

I must say that having worked with my CFO for the last 18 years, in a private company, I can understand exactly what Maureen is describing. Being able to have absolute confidence, knowing that advice comes with a deep understanding of the business, and knowing that the technical aspects of the CFO role are “given” is very important to any CEO.

How does your CFO compare? If you are a CFO, are there areas you need to work on?