imagine. Subsequent to 2007, after the crisis, the pricing of
risk has become more realistic. So post-2008, people started
evaluating risk in a more educated manner; and so the
CFO’s role became much more important. The CFO plays his
role even prior to 2008 in a similar fashion but in a market
on a good run “people don’t listen to the voice that comes
from within the company.”
“Four years prior to the crisis everybody looked at an
opportunity and then they just jumped at it. The last four
years of the crisis has also taught them what not to do. I
think today in a scenario of what not to do, the CFO’s role
has become much more critical and important.”
This has meant companies starting to take the governance
position “quite seriously”. A company will now ask
questions where they would not have before, and post-
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2008 there’s a “shift in how the CFO is being seen in
the organization”.
The CEO – CFO axis is crucial for the governance. What is
the ideal dynamic between the two?
The panelists agreed that the most important partner
of the CEO is the CFO – “a good CFO supports the CEO in
achieving the strategic plan”. A good CFO also complements
a CEO “by having a different perspective on matters”.
The panelists also agreed that the CFO “should be a
guardian of trust”. CFOs are often regarded as control
freaks – “we are not anymore”. CFOs should provide
the parameters for strategy, provide options, and
generally strike a balance between controls and
encouraging innovation.
The Role of the Chief Financial Officer in Corporate Governance
9/19/13 10:08 AM