CHIEF VALUE OFFICER – THE IMPORTANT EVOLUTION OF THE CFO | 2. THE CHANGING CFO ROLE
2.4 CFO, CEO and COO A positive dynamic between the CFO and CEO was seen by most roundtable participants as fundamental to the success of the organisation. Several commented that the pandemic had reinforced that dynamic. Some categorised it as the change in the CFO role from ‘Dr No’ to ‘Dr How’ – how can the organisation achieve this given the constraints and range of opportunities that it faces? Several roundtable participants were former CFOs who were now CEOs. They commented that they saw the step from one to the other as a natural progression and, in the economic climate of 2023, they could not see how they could discharge their current responsibilities without having had the CFO experience. A CFO in mainland China commented that another function of the CFO, whether we call them the CVO or the CFO, is to oversee the entire value chain of the company’s
operation. The results of various aspects of that will eventually be summarised in finance. This gives the CFO an advantage, giving them a comprehensive understanding of the company’s processes or business. This puts the CFO in a better position to become a sparring partner for the CEO, brainstorming together and cross-checking, verifying, or validating various assumptions. Our participants argued that this is a particularly important part of the CFO’s role in creating value. A discussion of the distinction between the CFO and the chief operating officer (COO) was a more nuanced conversation. In smaller organisations that did not warrant a COO role as such, there was a consensus among the roundtable participants that the CFO role embraced the operational aspects of the COO role, such as the focus on process efficiency and back-office operations. For the larger organisations, the convergence of the CEO, CFO and COO roles was highlighted by some participants.
They argued that, for organisations to create value efficiently, it is essential for the three roles to operate in unison with, to some extent, overlapping responsibilities. In that way, strategic goals would be attained, and value preserved and created. A CFO from Hong Kong SAR related the importance of the CFO role, at an executive level, to another aspect of value, suggesting that having a CFO at this level and with a role in managing and creating value would intensify the focus on the sustainable nature of the organisation. One of the key drivers for this would be the circular economy and the recycling of products. This participant suggested that while, on the face of it, the cost equation might look in one direction, the value equation – aligned to a broader range of stakeholders – looked in another, commenting, ‘we have to find a cleverer way to make the Earth better but [still] be profitable’.
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