LESSONS FROM LEADERS:

Advice for a First-Time CFO and the Scope of the Role

Executives don’t reach the upper echelons of corporations alone – they are influenced and supported
through peer networks and interactions with other senior leaders. In this glimpse into the ExecuNet
Finance Roundtable, we offer some of the most pertinent advice from executives to a first-time CFO
and on the scope of the role.
 LESSONS FROM LEADERS

CFO Magazine reported that one-in-four of the Fortune 1000 changed their CFO last year, and the average
tenure of a CFO is three years. What advice would you share with someone considering a CFO role in a publicly
traded company? What are important issues before accepting the role? What are key items during transition?
As a CFO, how much involvement do you have with HR, IT, insurance and risk management? Do they report
to you? If not these departments, what else reports into you other than accounting/finance? Any ideas for
managing the increasing scope?
—Mark Richards, Moderator, Execunet Finance Roundtable

“I think it varies some with the size of the company. I see HR
under the CFO a lot in smaller companies but not in larger
ones. IT is often under the CFO but not always. Insurance and risk
management are also often with the CFO. The other one that is
commonly placed under the CFO is materials management.”
—Scott Miller, CFO, Healthcare
“I have been CFO of an early stage company for two years,
with 2007 revenue amounting to $34 million. HR, IT, insurance,
risk management (including credit and collections) reported
to me as CFO.”
—Glen Katlein, Partner, Professional Services Industry

“Every company is different; I have known of companies where

“I think a key consideration is what type of company you are
going to relative to what you are leaving. I recently changed
into a divisional ‘CFO-like’ role in the past year. I went from
a more senior finance leadership role at Procter & Gamble to
a mid-size services firm. Mentally, I knew it would be different
but was not prepared for the lack of processes, systems and
resources.
My experience over the past year, and from talking with my
CFO, is that the scope is manageable, assuming you have reliable
accounting systems from which you can extract the necessary
operational data/metrics. My company had different systems
in each division due to acquisitions, so getting everyone on a
standard system and work process was a key.
The internal control process is also important. Do you
have the folks in the finance organization who can drive the
business and be a partner to general management, or are they
more accountants who report data but have no perspective and
guidance on what to do next? Having folks with operational
finance experience versus experiences dominated by accounting
is critical.
If I were to move to a role at another company, the above
would be my key priorities to getting a sustainable system in
place. My experiences in the past year certainly validate these
as the top priorities to feeling stable.”
—Martin Layding, Finance Director, Consumer Products
finance reports into the COO vs. CFO. I have seen procurement
report into the CFO, COO, CEO and in some cases, directly to
the board. HR is in a rather unique position in that it spends
a great deal of the company’s money, but it is not controlled in
the true sense of financial controls. IT should fall under a CIO, but
I have seen it fall below the COO and others in an organization,
depending on the size. Finally, both risk management and
insurance should always fall under the CFO, along with asset
management and inventory control.”
—Ralph Salier-hellendag, Project Director, Energy Production
“This tends to vary by the size of the company. We do IT
outsourcing for the middle market. In smaller, mid-market firms,
it is reasonably common for IT to report to the CFO. Our success
with outsourcing comes from an ability to articulate benchmark
performance and provide IT governance without a full time
executive assigned to the task. HR will report to the CFO unless
the company deems the HR function to be critical to operations.
Service and staffing companies often have an HR professional
due to the composition of the primary asset being people. With
a company’s increase in size, it is easier to justify a professional
leader dedicated to the specific task.”
—Ronald McDaniel, CFO, Business Services

“Reporting responsibilities will differ with every company. I

“Just make sure your skill level meets the job competency levels
the company desires. Do a Dunn & Bradstreet report on their
performance. Make no mistake about it – large publicly traded
companies are all about meeting financial performance goals,
and if not, they fire someone. Today’s corporate environment
does not care about you. Just keep that in mind and have an
escape plan.”
—John Kumle, Consulting, Business Services
have worked for companies where procurement reports to
the COO or the CEO. I have seen HR, which is rather unique in
function, report to the CEO or CAO (Chief Admin Officer) but
rarely to the CFO. IT usually falls under a CIO who can report
directly to the CEO but in most cases falls under the CFO.
Everywhere I have been both risk management and insurance
falls under the CFO.”
—Sergio Franco, Vice President, Aerospace and Defense

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LESSONS FROM LEADERS
“I have been both a CFO and COO in a variety of private
companies and divisions of international companies. In almost
all cases, I have been responsible for IT, HR and facilities. In
a couple of instances, I had sales responsibilities for specific
distribution channels.  internal set up through administration and teams.
Currently, I have a client that is a 500 staff-size service
company with over 20 locations. The CFO is responsible for only
the traditional finance and accounting related matters. This is the
first time I’ve come across a CFO role with this narrow a scope.”
—Hugh J. Glazer, CFO Consultant,
Publishing and Professional Services
“I was the CFO in a company in West Africa and had HR reporting
to me. It’s a global company, and the rules are different in
different countries depending on the size. It is very different for
the global CFO of the company. It, therefore, depends on the size
and complexity of business and how the company is organized
geographically.”
—Sunil Verma, Head of Finance, Marine Transportation
“For the CFO transitioning from a private company to a
public one, the major change is that you become a high
profile spokesperson for the public company – very different
than a private company environment. If you have not done
public speaking to any degree, I urge you to get involved with
Toastmasters or some ongoing public speaking forum. How
you say it is as, or more, important than what you say. Further,
take time to meet with all of the board of directors and audit
committee prior to taking the job. They will direct your future as
well as be allies.
All of this is driven by the shortened time frames of
reporting for public companies (never mind SOX/compliance).
Ensure that you have the following in short order by asking many,
many questions in the interview process:
1. Experience and reliability of staff
2. Reporting/ERP/MIS/dashboarding systems/etc
3. Relationship with the CEO and other executives
Also, try to ignore the daily stock price – if you can.”
—Gerald Vickers, CFO, IT
“Having worked in a number of different companies, I think it
is best if IT, insurance and risk management report to the CFO,
along with other finance, accounting and treasury functions.
Occasionally, it is good to have purchasing report to the CFO as
well, but that depends on the type of organization. Usually the
CFO is trained in these areas, more so than the COO, and it allows
the COO to spend more time on true operations, where they are
needed to lead the most.”
—Edwin Norse, Consulting, Financial Services
“A CFO manages the organization’s strategic value and that value
is enhanced with its influence on HR, IT, risk management and
insurance. Such functions should always report to the CFO, as they
then bring the external strategy with customers in alignment with
 
When middle and junior level team members of finance
see their CFO involved in these areas, it further enhances the
commonality of process, as all these functions have huge bearing
on company’s cost structure and thereby on profitability.”
—Nitin Ajmera, Director, Healthcare
“Overall, I surmise it depends on the company’s size. We are fairly
small ($50 million annually), so my hands are in everything,
including running the HR department, having IT report directly
to me, and working hand-in-hand with operations and sales to
push the top line.”
—Mark D. Wagstaff, Vice President, Manufacturing
“I believe there is a tendency by companies to downplay the
role that a highly experienced treasurer plays in boosting the
capability of a CFO to be more involved with overall strategic
planning. Treasurers possess expert knowledge of commercial
and investment banking, rating agencies, capital markets,
payment systems, debt management, benefit plans, tax and risk
management. All are highly technical areas and require long-
term oversight if these functions are to provide value to the
enterprise. The delegation by a CFO of these key functions
would increase the CFO’s effectiveness in managing a broad
array of business functions across the enterprise.”
—Name Withheld, Vice President and
Assistant Treasurer, Insurance
“In a previous CFO position, I was responsible for what was
called the ‘Corporate Process;’ complex issues were researched,
briefed, and decisions were formulated to advantage all existing
corporate expertise while ensuring corporate core values and
vision were accounted for. In the end, the CEO made the final
decision. This process insured that the CFO didn’t dominate all
decisions and that all C-level players had an adequate venue to
air their Pet Rocks.”
—James Eisenhart, Senior Manager, Aerospace Defense
“Having been a CFO for a small- to mid-sized company for
the past six years, all of those functions you mentioned have
reported into me. I have not always had the luxury of having
‘departments,’ with the exception being IT. A lot of the human
resource and risk management responsibilities I have had to
handle myself.”
—Patrick Lindemann, Vice President, Investment Management
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“It depends on the company and what you’re trying to manage.
I believe you need an IT leader and an operations leader
– separate from the CFO. They need to manage their own
island. Granted – if you’re the CFO – you are connected to every
area of the company; your influence is felt everywhere.”
—Douglas Emond, CFO, Financial Services
“It definitely depends on the size and structure of the company.
At my current company ($350 million annually), the CFO
has a vice president of finance (me) reporting to him, who
is responsible for multiple functions which include treasury,
insurance and risk management. IT and HR report to him as well.
At my previous company, which was a worldwide company (over
$1 billion in revenue) and had much more complex HR, treasury
and IT structures, HR and IT reported directly to the CEO, while
treasury and risk management reported to the CFO.”
—Debra Jackson, Vice President, Homebuilding
“I now have, and have always had, everything except HR. I have
seen IT report directly to the CEO/president, especially if there
are major system changes underway that significantly influence
the overall business. Ask anyone else in most companies about
insurance and risk management, and their eyes will either
glaze over with lack of interest, or their eyes will pop wide open
because they have no clue what it is about. CFOs are generally
the only one to really manage those areas. I have most often
found a similar situation with IT. People like to think they know
IT and are interested in it, but when the work starts, they lose
interest. I have also had customer service report to me since it
was highly credit oriented in our business. Risk management
may be a large opportunity in your company if you have not been
able to give it much focus and/or if you have a less than stellar
insurance broker.”
—William Steckel, CFO, Alternative Energy
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LESSONS FROM LEADERS
“From my experience in my current job, IT started under the
CFO then transferred to the COO and now is back to CFO. This
has been a tough road, and I strongly believe that the IT needs
to be under the CFO. The more approvals for new initiatives
the better, for both finance and operations. The COO is more
concerned with getting product and selling the product by any
means they can. The manual and the systems controls are then
eliminated, changed, or not followed. New business models and
practices happen without analysis of profit/cost being done.
With IT under the CFO, more system controls can happen; more
analysis occurs on the front-end if the company should pursue
a change to the business model rather than just reporting
the end-result, good or bad. 
I would not allow any system or new business practice in
Q4. It becomes a corporate accounting nightmare in figuring
out what happened...especially if you are growing and physical
inventory is needed.”
—Scott Hadwiger, Global Director of Financial and
Operational Business Development, Retail
“It’s my belief that we are at a true change in organizational
structure vs. a decision about where responsibilities lie. There
isn’t an aspect of business (or life for that matter) that isn’t
run, supported, or influenced in some regard by information
technology. So, why should it be considered a separate entity?
I for one will require technical expertise to be built into every
operating aspect of my business and will forego a separate
internal IT organization all together.”
—Carolyn Cozad, Founder,
Career and Health Coaching Services