Now more than ever the CEO-CFO relationship should be more of a partnership than anything else, according to Michael Kelly, partner and management consulting consultant at EY.
Between the growing scope of the CFO’s job duties and challenging economic conditions, finance chiefs should have a clear vision into all areas of the business, and a tight relationship with their chief executive counterpart is key for this.
The QB of the organization
Between the pandemic ending, the economy reopening, supply chain issues and rising interest rates, finance leaders have had their hands full over the past few years, and in the past year especially.
“There’s a strategic piece to all of these issues — which covers driving products and markets — that the CEO takes care of, but there is also the financial piece which goes hand in hand with the economic impact of strategy,” said Kelly in an interview.
The CEO and CFO relationship needs to be extremely tight, and more of a partnership instead of a mentor-mentee relationship, according to Kelly.
The expanding role of the CFO in recent years has crept into the realms of tech, customer service management and even human resources, and led finance chiefs to do most of the heavy lifting of the C-suite.
This job creep has become a major source of stress, as CFOs are also still responsible for the storytelling of the business, and has even caused some tension between CFOs and their C-suite colleagues, according to previous reporting from CFO Dive.
However, Kelly believes that this expanding role is actually helpful to the CFO. “I actually view it as a positive for the CFOs,” he said. “We're seeing more and more CFOs actually elevate to the CEO role.”
“The CFO has to be a quarterback and a master of many town halls, so they've got ESG, they've got new tech, they've got reporting, controls, they've got tax forecasting and just thinking about all areas that they touch. They've got a good view of that company. And that actually parlayed into where you see more CFOs elevate up into the CEO role,” he said.
Finance chiefs who take a seat at the decision making table are more likely to step into the CEO role and succeed, according to previous reporting from CFO Dive.