The Importance of the CEO/CFO Relationship

Partnerships are the backbone of any business. The relationship between CEO and CFO is the most important of them all. A CEO choosing their CFO is like a Presidential candidate searching for their VP. The CFO is the CEO’s co-pilot, trying to navigate the company through each hurdle.

CFOs help to ground the vision of their CEO, providing the forecasting and strategy to bring their long-term goals to life. The role of CFO continues to evolve, bringing them into step as a natural heir to the CEO. The partnership between CEO and CFO touches every aspect of the business, from investor relations to cash flow planning.

A CEO must test the waters with their potential CFO throughout the recruitment process. Identifying what you need from CFO is the first step. It’s why many CEOs choose to work with specialist recruitment agencies to find the best candidate to forge a close working relationship with.

Boutique recruitment agencies, such as FD Capital, take a curated approach to recruiting. They work closely with CEOs to identify the needs of their business and find a CFO who will fit into the company culture.

We’re exploring the importance of the CEO/CFO relationship and how it should work in practice. Choosing a CFO who can work in unison with the CEO is crucial to the business’s success.

A Diverse Skills Set

A CFO should fill the skill gap of their CEO to create an effective team that can function and work together. It’s the CFO who provides the CEO with the support and guidance that grounds their decision-making process.

Most CEOs have limited financial experience. It’s the CFO who steps in to oversee forecasting and strategy, examining everything from cash flow to supply chains. The CEO and CFO must use their complementary skills to develop and track the success of their short and long-term strategies.

While every CEO needs leadership skills, CFOs provide them with the financial insight to push ahead with their decisions. A CEO would be less confident in their leadership skills if they didn’t trust the insight and skills of their CFO. The CEO can only be as effective as their CFO.

The CEO/CFO relationship is like a puzzle. Each brings the pieces that the other lacks. Your CEO and CFO should bring different skills to the mix, complementing each other across every aspect of the business. The success of a CEO hinges on their relationship with the CFO.

Relationship with the Board

Gone are the days when company boards only met with the CEO. Today’s CFOs are becoming increasingly visible, working closely with the board and other investors. Your board will want to work with a reliable CFO that they can trust to develop a winning strategy with the CEO.

The board are more likely to support a CEO who has a strong working relationship with their CFO. A CFO is expected to offer them an unbiased perspective on the company’s position and strategy. Presenting a united front is therefore vital for winning confidence from the board.

Working Chemistry

Just like a President and their VP, a CEO and CFO need strong working chemistry. They have to act in unison with each other while staying independent. The CEO is responsible for overseeing the company’s direction and strategy. The CFO maintains the company’s finances and ensures it has a strategy in place for any financial possibility.

CEOs and CFOs need to trust each other and be able to work together. A CEO should look to their CFO as their most senior advisor and someone whose opinion they can rely on. They should share the same ambitions for the company and agree on a strategy to achieve them.

The key responsibility of a CFO is to provide the financial planning necessary to achieve this strategy. Their work focuses on overseeing projections, forecasting, and analysis to track the company’s progress. The CEO has to be confident in the guidance their CFO is giving them to work in unison in the company’s best interest.

This working chemistry evolves around the CFO understanding the CEO’s vision and mission for the company. A CFO can only be effective when they have a close relationship with their CEO.

Develop the Company’s Strategy

While the CEO and CFO often work independently of each other, they have one key aim. They must work together to develop the company’s strategy, before delivering it. The CEO and CFO will interlink with each other throughout this.

The CFO will document the company’s strategy and base it on their financial forecasting. This plan will need to be translated and communicated to every relevant aspect of the business. Each person within the company will be assigned a role in this strategy.

Financial planning is the backbone of any company’s success. A CFO will ensure that there are sufficient funds throughout the company and that they are used efficiently. While the CEO is the company’s principal leader, a CFO will take on a leadership role as well. They’ll be expected to work with their colleagues to implement their strategy and provide guidance to achieve it.

Without a reliable CFO, a CEO would never be able to manage all their responsibilities effectively. Company strategies will always be better executed when the CFO and CEO can develop and implement them together.

A United Voice

Communication is vital to the success of any business. The importance of the CEO/CFO relationship means they need to have a united voice. Both need to be on the same page to provide a clear vision for the company. Each will need to understand the workings of the other and understand their work.

The CFO and CEO will need to provide a united voice for the company’s purpose. A CFO will be expected to communicate the financial situation of the company to stakeholders, investors, and the board. The collective message from the CFO and CEO must be consistent and feed into the company’s strategy.

Finding the Right CFO

Today’s CFOs play a more vital role than ever before. They’re the co-captain of the ship and vital to the company’s success. A strong CFO/CEO relationship can create a winning strategy and build confidence from investors.

It all starts with finding a CFO you can build a strong working relationship with. The recruitment process is vital. FD Capital is a boutique financial recruitment agency led by entrepreneurs and CFOs who understand the importance of the CEO/CFO relationship. They specialise in Interim CFOs and Part-time CFOs. Start recruiting for a CFO today by visiting FD Capital Recruitment.

Have you read?
The World’s Largest Economies, 2022.
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CEO Spotlight: For Plaintree Systems CEO David Watson, the Future is Taking Its Cues From the Past.
How to Build a Winning Sales Team That Gets your Business Soaring by Jakob Wissel.
When Culture Matters by Bill Yeargin.

This report/news/ranking/statistics has been prepared only for general guidance on matters of interest and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, CEOWORLD magazine does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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