Ron Rael
Ron Rael

The Traits of Today’s CFO

Look ahead and improve your effective leadership today.

February 2, 2012
by Ron Rael, CPA

The various components of management accountants’ jobs are changing faster than you might imagine.

CFO and Controller’s Future Roles

Our primary roles in the next few years, and probably beyond, are as follows:

  • Collaborator. You must be able to collaborate with everyone in the organization. You will not be invited to the table and trusted unless you know how to collaborate effectively.
  • Consultant. Operational managers and executives look to you and your team to offer suggestions for improvement. You must be proactive and consistent in this role.
  • Communicator. In our near future, communicating takes on a whole new dimension. You and your team must be the truth tellers for the organization. The data and metrics you report on must be meaningful for everyone.
  • Strategic Leader. The CFO or controller must be the one taking the initiative to lead strategically.

Fulfiller of the Eight Expectations

Figure 1-1 uses a wheel to represent your team’s success. Without a strong, flexible, and talented team, you will not be the strategic leader that you must be. Each segment of the wheel represents the expectations and demands placed upon the CFO’s team by the CEO, board, managers, and other stakeholders.

The CFO and Controller Team’s Responsibilities

The wheel represents what management accounting must continuously and effectively do:

  • Assert Financial Control. One responsibility that has not changed for us is ensuring that our organizations have a control system in place that works. Whether you are subject to government regulations, worried about your company’s survival, or working for a successful organization, this role continues to grow in importance.

    If you do not take this responsibility seriously, no one else will.
  • Manage Liquidity and Working Capital. A second responsibility that remains the same is ensuring that your organization has the funds to operate. This also has grown in importance because of the recent recession’s after-effects.
  • Ensure Regulatory Compliance. Management accountants continue to have the significant responsibility of ensuring that they keep executives and themselves out of jail. Every year there are more rules they must spend time understanding, so that they can help their employer remain compliant.
  • Be the Stewards of Financial Performance. This stewardship responsibility goes beyond issuing regular reports. The CFO and controller are depended upon to ensure that they are measuring and monitoring all the important success factors of the business and reporting on them. In addition, because their reports will now contain more nonfinancial metrics, they must work to determine the quality of those data points that they do not control.
  • Carry Out Cost Control and Perform Profit Enhancement. Because staying competitive has become of extreme importance in the global economy, the controller and CFO are expected to offer multiple suggestions on reducing the cost of doing business and enhancing the bottom line. Everyone else in the organization is narrowly focused on their responsibilities; therefore, the controller and CFO must be focused on the broad strategic picture.
  • Be Bridge Builders. The management accounting staff can no longer afford to be a silo or an island unto itself. An increasingly important role for us is building bridges with other parts of the organization, a function that works in parallel with communication.
  • Be Advisers to Management and the Board. CFOs, controllers, and other management accountants in leadership roles are now viewed as key people to whom management and the board turn for advice. If your executives do not include your thoughts in their future planning, then you have not taken on this responsibility.
  • Partner With Operational Managers. Another responsibility of management accountants is equal partnership with other groups in the organization, especially operational managers.

The Management Accounting Department’s Journey Into the Future

Here is what the future holds for all of us who work in the internal finance function of an organization: public, private, government, nonprofit and so forth.

If we do not take advantage of this transformation, or even notice that it is occurring, we will continue to be minimized, downsized, chastised, criticized, ostracized or worse yet, outsourced.

This transformation that the finance team, group, or department must make is designed to help our employer stay viable and successful. Making this transition will ensure that we will be seen as a core function.

We must move from being the people who keep the data to the people who keep the trust. This transformation is referred to as a value creation approach to management accounting.

This article has been excerpted from The Traits of Today’s CFO: A Handbook for Excelling in an Evolving Role. You can purchase the publication on CPA2Biz.com.

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Ron Rael, CPA, is a leadership coach and an award-winning speaker and facilitator who uses advanced learning techniques to deliver measurable, bottom-line results.