Being the best CFO means having these 6 qualities. Does your CFO have these qualities on display every day?
Your CFO (Chief Financial Officer) plays a vital role in your business. From day-to-day finances and decisions to leadership about the future of your business, you need your CFO on-the-ball to ensure your success.
Below we explore 6 qualities that set the best CFOs apart from the rest.
1. Uncompromising Integrity and Ethical Standards
You have a lot of trust in your CFO. They need to be able to perform within the law and ensure your business is always adhering to necessary regulations. This is because the CFO is essentially the custodian of everyone’s money. The CFO has a responsibility to the employees, customers, management and other stakeholders to act with integrity. Sometimes it may be the CFO’s responsibility to deliver bad news to the CEO, at times risking their job for the benefit of the stakeholders. But if they are honest and hardworking, they will be prized in any business.
2. Financial Accounting, Cash Management and Corporate Finance Competence
This is the foundation of the job. Your CFO should know what they are doing when it comes to the fundamentals of business finance. They have to understand these processes and be able to communicate them clearly with relevant managers, creditors and stakeholders. They also have to be able to troubleshoot problems if things aren’t going as they should. Knowing how to fix a problem is integral the job. More often than not, if a business is going smoothly, no one notices the CFO. But the best CFOs stand out and make a difference when they need to.
3. Strategic Vision and Leadership Skills
Your CFO is tasked with securing the economic future of your business. That’s no small ask. For this, they have to be able to think strategically and be present in the decision-making process. They also must help create and execute business plans and show leadership over the whole finance department, working with management. In this sense, the CFO’s job isn’t just “running the numbers,” it’s being a negotiator. They have to steer the ship and ensure there are no obstacles in the way. And if there are, the CFO has to make the tough decisions, alongside the executives, and ensure it’s the best thing for the company.
4. Results-Oriented Mindset
The CFO will ultimately be judged on their results. The business isn’t there to survive, it’s there to thrive. The CFO has to have a strong focus on the future, achieving smaller objectives along the way as specified in the business plan. They must also ensure the most applicable KPIs (Key Performance Indicators) are used to best assess the financial health of the business. With the whole company focused on the same goals by using these measures, the business is far likelier to succeed.
5. Risk Management
Managing risk is vital for any CFO. They need to hit targets, but they can only do so by avoiding risks. Knowing how to deal with these problems quickly and effectively when they surface is of the utmost importance. For example, as with many thriving businesses, an executive may open a discussion about floating the company on the stock market. However, this is often a massive risk which can lose the company and its stakeholders a lot of money if it doesn’t pay off. It’s the CFO’s job to accurately calculate this risk and provide their assessment of whether the company should proceed, making the best case for the financial future of both the company and its stakeholders.
6. Communication and Collaboration Skills
Some of the concepts the CFO deals with are well out of the domain of other interested parties. It’s the CFO’s job to communicate effectively with them, explaining the health of the company and its future direction in simple terms. They also have to collaborate with numerous departments and teams. Working with other people who have different interests can be difficult, but the best CFOs will provide expertise in their area and always be willing to learn about new ones. This will ensure their knowledge-base is always growing and the business has a central focus towards the future.
The job of the CFO is wide-ranging and demanding, but these 6 main qualities are shared by the very best CFOs, creating financially-strong companies long into the future.