The CFOs Role and the CEO/CFO Relationship

The CFOs Role and the CEO/CFO Relationship

This Future of Finance Leadership edition summarizes the key points from one of our most popular CFO Talks, The CEO/CFO Relationship. I interviewed a seasoned CEO for his perspective on the CFO’s role and what makes a successful CFO/CEO relationship.

Our CEO Guest

Tom Burke, a serial CEO in the pharmaceutical space shared insights from his experience working with and leading multiple CFOs during his career.

Tom performed his undergraduate work at the University of Minnesota and earned his MBA from the University of Saint Thomas in Saint Paul. He is an avid cyclist and keeps in shape during the chilly Minnesota winters by lacing up his skates and playing ice hockey.

Enjoy Tom’s insights.

The CFO’s Role – 7 Key Points

1. The CFO’s Role as a Forward-thinking Strategist

Tom emphasizes the significance of the CFO’s role as a forward-thinking strategist. CFOs are not just number crunchers; they are integral to driving the organization’s growth through their ability to identify emerging opportunities and anticipate potential challenges. By staying ahead of the curve and offering unique perspectives, CFOs can empower the CEO with valuable insights to make informed decisions.

“Future thinking and strategic planning are critical qualities for a CFO. Identifying issues and opportunities that may have been overlooked is essential. A proactive CFO can think ahead of the CEO and contribute new and innovative ideas.” - Tom Burke

Related: The Evolution of the Chief Financial Officer Glenn Hopper

2. Focus on the Specific Issue at Hand

Tom highlights the significance of honing in on the main issue during board presentations. By keeping the focus narrow and providing a concise rationale, CFOs can effectively drive decision-making processes and ensure that board members grasp the critical points involved.

“When presenting issues to the board, it is important to focus on the specific issue at hand. Avoid overwhelming board members with a long list of points. Instead, communicate the rationale and key points clearly and concisely.” - Tom Burke

Related: What the Board Expects from a Chief Financial Officer

3. CFOs in Acquisitions and Mergers

Tom underscores the vital role that CFOs play in acquisitions and mergers. Beyond due diligence, CFOs must carefully analyze the financial aspects of the deal and identify any potential challenges or cost implications. Their expertise ensures the financial success and seamless integration of the acquired company, contributing to overall business growth and stability.

“In acquisitions and mergers, the CFO’s involvement is critical. Evaluating whether the merger or acquisition is accretive to the business and identifying the necessary adjustments are key responsibilities. The CFO plays a crucial role in analyzing the numbers and ensuring the success of the transaction.” - Tom Burke

Related: Investment Analysis: Introduction to Mergers and Acquisitions

4. Solve Issues Within the Management Team

Tom emphasizes the importance of addressing and resolving issues within the management team. By fostering open communication and understanding each team member’s perspective, CFOs can leverage their strategic thinking and problem-solving skills to find solutions that align with the organization’s goals. This approach reinforces a strong CEO/CFO relationship and maintains the effectiveness of the leadership team.

“I prefer to solve issues within the management team rather than involving the board. By understanding the rationale and strategy of each individual involved, we can arrive at the best decision collaboratively.” - Tom Burke

Related: High Performance Teams - fact or fantasy? - Andrew Jenkins

5. Fairness and Providing Feedback

Tom stresses the importance of fairness in dealing with underperforming individuals or employees who may not be the right fit. By providing constructive feedback and creating space for personal growth, CFOs contribute to a fair and supportive work environment. This approach benefits not only the individual but also enhances team dynamics and overall organizational success.

“It is important to provide feedback and allow underperforming individuals to find the right path for themselves, for the sake of fairness. This approach to leadership has a significant impact on oneself, teammates, and the person being impacted.” - Tom Burke

Related: Infusing Your Employees’ Roles with Purpose and Meaning James Perry

6. The Impact of People in Business

Tom highlights the significance of people in driving business success. While technology and strategy are essential, it is the people within the organization who execute these plans and deliver results. Recognizing and appreciating the right talent fosters a positive work culture and motivates employees to excel, ultimately driving the business forward.

“Technology, deliverables, and strategy are important, but without the right people, a business cannot succeed. Recognizing and valuing the right talent is crucial for long-term success.” - Tom Burke

Related: What is the Human Capital Net Worth of Your Business?

7. Authentic Discussions and Open Communication

Tom emphasizes the importance of authentic discussions and open communication among the leadership team. By creating an environment where everyone feels comfortable expressing their opinions and concerns, CFOs contribute to a culture of transparency and collaboration. This fosters a healthy exchange of ideas, leading to better decision-making and a more cohesive leadership team.

“The best companies are comfortable with authentic discussions. It is essential for everyone to express their concerns and lay out their cards on the table regarding business issues and strategy.” - Tom Burke

Related: The Trust Buster…..Lipotage! Bob Phillips


The CEO/CFO Relationship – 6 Key Points

1. Trust:

The CEO and CFO must have a foundation of trust in order to effectively collaborate and make strategic decisions for the company’s financial health and growth. Trust enables open communication and transparency between the CEO and CFO, fostering a strong working relationship built on mutual respect. When there is trust, the CFO can provide valuable insights and guidance to the CEO, knowing that their input will be respected and considered.

Related: Leading at the Speed of Trust®

2. Strategic Alignment:

The CEO and CFO must share a common vision and be aligned on the strategic direction of the company. By understanding and embracing the CEO’s vision, the CFO plays a crucial role in translating it into achievable financial goals and strategies. Both parties should work together to align financial resources with the overall business strategy, driving growth and maximizing shareholder value.

Related: Team Alignment - Katharine Halpin

3. Complementary Skill Sets:

The CEO and CFO should possess complementary skill sets that balance each other’s strengths and weaknesses. A CEO who excels in strategic vision may benefit from a CFO who has a strong analytical and financial background. By leveraging their individual strengths, the CEO and CFO can form a strong partnership, enhancing the overall effectiveness of their collaboration.

Loosely Related ????: When Searching for Merger Candidates - Substitutes and Complements Make All the Difference

4. Communication:

Effective communication is vital for a great CEO-CFO relationship, ensuring that both parties are aligned on goals, strategies, and financial priorities. Clear and timely communication allows for informed decision-making and reduces the risk of misunderstandings or misalignment. Regular meetings and open dialogue create a collaborative environment where issues can be addressed proactively.

Related: CFOs – What Language Do You Teach In?

5. Collaboration:

A great CEO-CFO relationship is characterized by collaboration, with both parties actively contributing to the company’s success. The CEO and CFO should work together to identify opportunities, mitigate risks, and solve challenges through collaborative problem-solving. Collaboration fosters a sense of shared responsibility and accountability, promoting a unified approach to achieving business objectives.

Related: The Key to Collaboration is….

6. Financial Expertise:

The CFO’s deep financial knowledge and expertise are essential for a successful CEO-CFO relationship. The CEO relies on the CFO’s financial acumen to provide accurate and insightful analysis, enabling informed decision-making. The CFO’s ability to interpret financial data and trends helps the CEO understand the financial implications of strategic decisions. Recognizing and valuing the CFO’s input allows for a more well-rounded decision-making process builds trust and encourages open and constructive dialogue. The wise CEO respects the CFO’s financial expertise and involves them in key decision-making processes.

Related: The Four Pillars of CFO Success

In conclusion, the CEO/CFO relationship is pivotal to the success of any organization. Effective communication, problem-solving within the management team, and forward-thinking strategies are essential for fostering a strong partnership. We hope these insights from Tom Burke inspire you to enhance your own CEO/CFO relationship. Take in Tom’s CFO Talk here, CFO Talk: The CEO/CFO Relationship

Check out our CFO Talk episodes, where we continue to explore the experiences and CFO-centric insights of finance and other business leaders from around the globe. As always, we welcome your feedback and suggestions for future episodes.


Identify your path to CFO success by taking our CFO Readiness Assessmentᵀᴹ.

Become a Member today and get 30% off on-demand courses and tools!

For the most up to date and relevant accounting, finance, treasury and leadership headlines all in one place subscribe to The Balanced Digest.

Follow us on Linkedin!