The cutting edge CFO: managing the Board's expectations

This special report is a consolidation of expert views, thoughts and perspectives from a panel discussion held in Kuala Lumpur on the two way relationship between the board and the CFO. There is a multifaceted and intricate relationship between the CFO and the members of the board of directors. While there are unique and individual situations in different organisations, it is almost universal that part of the CFO's role is to manage board expectations.

Topics covered:

Management accounting: Business: Strategy, Expert
Management accounting: People: Influence, Expert

6 Comments/Reflections

Oaitse Gabadirwe Apr 2022

Separation of Roles and Board Expectations of the CFO

Belatedly read but came in to reinforce and refresh my understanding of the Role CFO as well as that of Executive Management in General and the Board expectation of the CFO /Executive Management.

Steven Gleaves May 2020

Interesting and well written article

Clive Webb ACMA, CGMA Sep 2018

Key take aways:

1. What The CFO Expects of The Board

There is a multifaceted and intricate relationship between the CFO the members of the board of directors. Expectation of Board to CFO and from CFO to board. Relationship vital to understand as CFO is custodian of lifeblood without which company could not survive: money; finances; balance sheets.

2. The Separation of Powers

Like a sovereign nation-state, an organisation can benefit from separation of powers:
Shareholders - Legislative stratum
Board - Judicial
Management team - executive body

3. Who Gets To Sit There?

Need for diversity in board members, bring varied perspectives and wider understanding.

4. Fiduciary Responsibilities

Board equally responsible with CFO.

Suggest external evaluation of the board be conducted every three years to assess How the board is really adding value to the long-term plans of the business.

5. Measuring The Boards Effectiveness

Constructive disagreement should be productive not feared.

How long is too long on board? After 9 years there is danger of complacency.

6. The Board's Expectations

CFO needs to understand there needs to be a balance between risk management and business strategy.

Summary: Independence of board vital as is more effective, frequent and more meaningful communication between board and management team.

Debbie Mallett Apr 2018

This was a good article. Being a governor as well this helps show the difference in the role and the expectations. Sometimes you do see the board trying to be involved to much in the Operational side of the business which is for the management team.

This article helped enforce what I already knew to be the processes.

Zsolt Raffai Mar 2017

This is a fair overview of the CFOs role on the Board. No particular insights, though. Probably could better serve the learning needs at the Advanced or Intermediate levels.

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