Confidence in CFOs

What Makes A Great CFO?

If you ask fifty chief executives “What makes a great CFO?” you will probably find that most CEOs and board members agree on many if not most of the key attributes of great CFOs.  Executives agree that a great CFO isn’t a bean counter. The term is a pejorative and we don’t mean any disrespect to those who count the beans because it is vitally important. But we do agree that great CFOs—even mediocre CFOs—don’t count beans.

Here are some key characteristics of great CFOs:

  • strategic and visionary
  • operationally-oriented
  • impacts top- and bottom-line growth
  • leads and motivates
  • communicates effectively and persuasively
  • has astute business acumen and judgment
  • has unimpeachable integrity

Does the investment community reward companies that have great CFOs?

In a straightforward world, great CFOs inspire confidence, and that should increase share value.  There isn’t really a scientific correlation because the definition of ‘greatness’ is variable and imprecise. Some things just cannot be measured precisely. Common sense and anecdotal evidence suggests that when investors have confidence in the top finance executive, the company and shareholders are rewarded.

Unfortunately the investment community can punish as vigorously as it can reward.  One disingenuous comment from a CFO, and confidence is shattered, as well as the CFO’s reputation.

So we would add the following confidence-enhancing attributes to the list.

A great CFO:

  • has insight into what drives the numbers
  • establishes and explains meaningful metrics that add value
  • has an integrated and comprehensive understanding of the business
  • interprets and sees opportunities in complexity and ambiguity
  • navigates risk with prudence and courage
  • thinks like an investor

We have not been exhaustive. Please weigh in!  How would you describe a great CFO?

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