The Role of Financial Manager



Abstract

This research paper aims at understanding the criticality associated with the designation of CEO and the role of CFO as CEO. Moreover, it discusses the vital role of the finance department in training a CEO, the rationale of hiring a CFO as CEO, and the pros and cons attached with it.

Contents

Is Finance Department a better place to train future CEOs?1

Two Actual Examples2

Pros and Cons of hiring a CFO as CEO2

Pros2

Cons3

Conclusion4

The Role of Financial Manager

Is Finance Department a better place to train future CEOs?

Yes, it is the best place to train future CEOs. As today's financial officers are aware of the fact that they have a great tendency to climb a ladder and become future CEOs, they have started to groom themselves for it. The main reason that is leading toward this trend is the company's investor. Shareholders are more interested in the financial performance of the company and the strengths and weaknesses of management. This gives CFOs the opportunity to polish their image and act as a more suitable aspirant to climb the position of CEO.

As there is an increase in the number of corporate acquisitions and reformation in the capital structures, it is visible the CFOs has a vital role in any organization to play. These CFOs have all the knowledge of trends and numbers that are required for an investor's satisfaction. To state it clearly, in this era, CFO's are more enthusiastic and zealous. They carry a keen eye and are sharp in their observations. Their role has become broader, dynamic and strategic than before.

The perfect CEO is one who has a 360 degree assessment of the organization, has superior communication, and people management skills, has a core understanding of organization's operation and products, is vigilant and is visionary. According to a survey, many of the CEO's hired today are with the financial background because they have greater abilities to understand the company's financials and to create value for shareholders. The role of CFO has gone under a change worldwide. There are many examples of CFO turning into CEO's. These examples do include giant companies.

Two Actual Examples

A publically traded company, SandRidge Energy appointed its CFO to be the company's CEO. It was solely the decision of the board as they were off the view that unique leadership is for the best interest of the company. James Bennet, former CFO and current ...