Bussiness Partnering Institute The CFO Is The Voice Of Reason In Business

This is the channel “Trends in Finance and Accounting” which has more than 84,000 subscribers! Click “Subscribe” to receive a notification and an e-mail when I publish new articles on this channel every Thursday and occasional Saturday. Some CFOs say that Accounts Payable should merely be processing transactions but I say it is contributing to the value creation in the company and should be considered a profit center. Watch me debate this with Ernie Humphrey on 27 January from 17-18 CET. You can sign up for free here. Lately, I have been writing and sharing a lot about the evolution of the CFO role. There is one word that keeps popping up in the comments. That is “Integrity”. In an attempt to become a strategic business partner, it seems that many people feel this word and fiduciary responsibility is often forgotten. Nothing could be more wrong but rather it should be table stakes for even holding the office of the CFO. That means when we list the main qualities of a CFO such as being financially savvy, transformational, influential, and social, integrity is often left out. That is by design though since cannot be a CFO (let us not even mention a good one) of you do not have integrity. You can tour some of the reactions to a recent CFO post of mine here. Still, while we talk about the evolution of the role let us once and for all agree that having integrity, being ethical, and contributing with objectivity in decision-making is a fundamental responsibility of the CFO and by extension the finance function. We will therefore explore this topic in-depth in this article.

What CFOs bring to the table

The CFO role is in constant evolution and often we discuss all the added elements that CFOs need to deliver on. Recently, I published my latest article on CFO types now depicting eight specific types. However, at the core, CFOs still bring financial expertise to the table. After all, this is the CFOs unique strength. In addition, CFOs have the advantage that they often do not make any direct business generating decisions. In some ways, this allows them to step out of the decision-making process and consider the decision from a different perspective. They can look at any given decision with objectivity using the below model.

Any decision made in the company should come with options that each have risks attached. Discuss the options 13

available and identify all associated risks. Once done, start to maximize the likelihood of the options materializing and mitigate the key risks. In this way, CFOs ensure that their companies will always make better decisions. CFOs must go further though than simply considering decisions from an economical perspective. They must also ask and question if it is “the right thing to do”. Here are some of the things to consider. Ideally, everyone else in the C-suite and the rest of the company will act with these considerations in mind as well. Still, we know that when the pressure to perform comes around some people will just cut corners. CFOs and by extension the finance function are there to see it through it. We must be the voice of reason in the business! I know it can sound boring and potentially destroy some value in the company. The alternative is worse though as we have seen through numerous accounting and business scandals.

What are you bringing to the table?

CFOs play a very important role in the company and so does any finance professional by extension. We must always consider carefully what it is we bring to the table and how can we contribute to making the best possible decision in the company. It is not an easy role and often we might feel we are not being listened to. In that light, becoming a true business partner becomes much more important. If we build strong relationships with business stakeholders, they will listen to us even they do not like to hear what we have to say.

What are you bringing to the table and are you remembering your responsibility of being the voice of reason? If you are a trusted partner you will gain more respect by bringing up the tough topics so, do not hold back. It is so easy to always say “Yes” but do understand that saying “No” in the right way helps you to develop an even stronger influence on the decision-making process! If you like what you read and would like to make a voluntary donation to support my continued content creation you can use one of the below options. All content continues to be provided for free!