CFO Due to the Increasingly Complex Nature Essay

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CFO

Due to the increasingly complex nature

Do you think finance departments are the best place to train future CEOs? Provide two actual examples of CFOs of publicly-traded companies who became CEOs of publicly-traded companies within the past 5 years. Do these individuals have the CPA and/or CFA designations?

CFOs are increasingly asked to engage in strategic planning for organizations, and to interact with other members of the managerial board in a meaningful fashion. According to Brewis (1999), "those who come from a purely accounting background are not generally expected to make such a speedy rise up the corporate ladder, but much has to do with the character of the individual and the mentoring system that the corporates provide." CFOs with an insufficiently broad perspective might simply focus on 'buying' solutions rather than engineering them through the careful and reasoned coordination of people and resources. CEOs must communicate well with members of the executive board and shareholders and provide a general vision for the company. While some CFOs are skilled enough to do so, others still remain locked in the comfort zone of their profession and focus simply on the financial data, not the more holistic needs of the organization (Picker 1989: 47).

Still, given the expanded role of CFOs, a strong CFO could very well have the required preparation to shine in 'soft' as well as 'hard' skills.

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Good CFOs "need to have both general managerial experience and financial expertise, and must be able to represent the company to the capital markets, serve as a principal sounding board for the CEO and, oh, yes, ensure that the company stays on the right side of today's stringent accounting regulations" (Freedman 2003: 22). A CFO that shifts to the position of a CEO must also assume a different mindset than the one which he or she was accustomed to in his or her former capacity. CEO's "must tolerate ambiguity and intuitive decision-making...It's all about building teams, setting out a vision and demonstrating high energy and confidence. And there are specific responsibilities in sales and marketing" (Young 2012). In contrast, the CFO's love of structure and focus on results and processes rather than people can be an advantage in his or her more narrowly-based position.

The successful transformation of a CFO into a CEO is thus highly dependent upon the personality of the individual in question, and it is difficult to make a sweeping pronouncement one way or another as to whether such a development is salutary, by and large, for corporations as a whole. Also, some….....

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