CEOs are realizing that their chief financial officers can do a lot more than just crunch numbers. The CFO offers the company in-house expertise.
Writing in Chief Executive, Fran Hawthorne points out the CFOs have an evolving role in mergers, acquisitions, and divestitures. They help to identify takeover targets; take part in negotiations; and help integrate the acquired company into the business. CFOs are now designing metrics for a range of topics. The CFO is called upon to explain implications of numbers to analysts, investors and credit rating agencies. The CFO has to explain implications of strategy. They may lead a discussion on whether a company has the capital to execute on a given strategy.
With these added responsibilities, there has to be caution that the CFO’s role does not expand too greatly, warns Hawthorne. The CFO should not fire anyone outside his or her direct chain of command, for instance. Nor should the CFO try to change the corporate strategy, that’s up to the CEO and the board.
The CEO and CFO should not get too friendly because the CFO reports to the CEO. But their relationship should be less formal, Hawthorne said.
For more about the new role of the CFO, as reported by Chief Executive magazine, please click here.