BSc, MBA, CPA, CA, CMC, PhD*
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CFO Relations with the Entrepreneur-Leader
What are the antecedents for a CFO to be a good "wingman" to the entrepreneur-leader or for achieving the emergent 'Dynamic Duo' state between them?
The CFO & CEO roles are viewed somewhat as counter-forces in public firms – the realism (some would say conservatism) of CFOs counter-balancing the optimism of CEOs. Yet, in the course of business partnering, “A good CFO should be at the elbow of the CEO, ready to support and challenge him/her in leading the business”. But, naturally-occurring differences in these two officers' personal attributes have a propensity to stir conflict. Nevertheless, these can be overcome, even leveraged, through informed management sensitive to various social interaction processes.
So far, we know that the nature of the relationship between entrepreneur-leaders (or CEOs) and financial managers (CFOs) is influenced by:
1. A shared leadership vision that is communicated to all team members;
2. While leadership may be shared, the CFO acknowledges s/he mostly plays the role of a supporting actor;
3. The quality of an enterprise's strategic decisions can be improved through functional diversity among; management team members as long as socially integrative procedures are managed (e.g. active listening based on mutual respect and trust);
4. The likelihood of harmonious & effective relations is enhanced when both job demands on the CFO and his/her managerial discretion is high;
5. Each of the foregoing is supported if the CFO has the greater influence on funding policies; and,
6. The most influential CFOs are older, with deep functional, company, and industry experience and some of this influence derives from close relationships with shareholders through the CFOs interaction with the Board.
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