Backroom bean counters to centre stage: The rise of the CFO

2019-01-18 21:17:45

New Zealand doesn't do 'rock star' CFOs.

But while Kiwi chief financial officers haven't attained the same profile, and extravagant wealth, as the CFOs of giant US corporations, neither are they any longer the backroom men and women of the "C-level" executive class.

CFOs are increasingly visible, and are number two only to the chief executive when it comes to explaining the company to investors and the wider public, including during times of crisis.

When Fletcher Building was facing media in February last year, announcing massive further losses, CFO Bevan McKenzie took to the podium alongside chief executive Ross Taylor.

Caroline Rawlinson, CFO of TradeMe for just under two and a half years, believes the emergence of the CFO as a public figure was a result of the evolution of the role.

The modern CFO is no longer the backwards-looking bean counter making sure the company financial statements add up.

They are a leader with responsibilities for developing company strategy, and communicating it to investors.

"A large part of my role is investor relations," Rawlinson says.

"When we engage with shareholders, the CEO (Jon Macdonald) will engage with the major shareholders. With some smaller shareholders, I am the interface."

But the hierarchical lines between the CEO and CFO are blurring. Investors look for a strong CEO-CFO relationship. It's hard to be a good CEO without having a good CFO to watch your back.

"The dynamic between Jon and myself is very equal," Rawlinson says.

"Leadership of the company is more widely spread," she says.

"These days there's recognition that great CFOs can be hugely valuable in making sure the right strategic decisions are being made."

One of Rawlinson's responsibilities at TradeMe is for strategy.

The data-led view CFOs bring to strategic planning means when strategy is being developed, the CEO is wise to have CFO in the room.

On the global stage, perhaps the world's most famous woman CFO shares a similar relationship with her chief executive that Rawlinson has with Macdonald at TradeMe.

Ruth Porat, CFO of Alphabet (Google), is paid many more times what Rawlinson gets, but she's involved in the weekly Alphabet strategy sessions, and when asked what she and CEO Larry Page focus on, told American news service CNBC: "What are the bets that will help us grow?"

Porat speaks like a CEO, and in interviews with media, answers questions that traditionally only the CEO would field.

The CEO does outrank the CFO, and is the final strategic decision-maker, but Rawlinson says: "The CEO can only be in one place at any one time, so sharing that organisational leadership role with the CFO is really important, especially in public market settings."

Despite the importance of public speaking, Rawlinson has never had formal training to speak publicly, but says: "It's not overly hard if you are across your business, and understand it well."

She also watches presentations and webcasts by her peers.

The top echelon of the CFO community is small in New Zealand, and they all know each other, and share tips.

The CFO is now so important to companies, that investors like to get to know them. And they want to see a strong relationship between the CEO and the CFO.

The rise in profile of the CFO has also led to interest in their personal lives, and their willingness to share aspects of it.

When Marc Rivers became CFO of Fonterra last year, the farming cooperative got a man used to speaking publicly about more than just the company balance sheet.

Rivers told media he saw the job at Fonterra as an "opportunity to make the world a better place", and the public got to learn a lot about the qualities of his grandfather, and watch Rivers give a eulogy to him on Youtube.


Most newsworthy

In December Chinese telecoms company Huawei's Meng Wanzhou became the worlds most famous CFO by being arrested in Canada, sparking a bitter diplomatic war between the two countries that some believe led to a Canadian man convicted in China of drugs smuggling being sentenced to death. She's not your ordinary CFO. She's the daughter of the Huawei founder. She's also very wealthy. When she was granted bail in Canada, she put up two houses in the country up as security collateral.

First woman of finance

English-born CFO of Alphabet, which owns Google. Before Alphabet, Ruth Porat was CFO of Morgan Stanley, and advised the US government during the global financial crisis. When she joined Alphabet, it was forecast she would earn US$30m-US$40m in her first three years, including the US$5m signing on fee. In 2018, Forbes named Porat as the 21st most powerful woman in the world, two places ahead of Queen Elizabeth, and eight ahead of New Zealand prime minister Jacinda Ardern, who was herself only one place ahead of Microsoft CFO Stacey Cunningham.

Tesla's saviour

​Deepak Ahuja is CFO of Tesla, which may be one of the most important companies on the planet with its battery technology and climate-friendly cars. He returned to the company to drag it back from the brink of collapse. It took US15m in stock options in Tesla to woo him back.

Best-known face

Facebook CFO David Wehner regularly fronts TV interviews, like Porat. His total compensation in 2017 alone was just over US$22m.

Best-loved CFO

Investors in Apple have come to love the Italian accent in which its CFO Luca Maestri announces its latest quarterly earnings results. In 2017 alone, he was paid US$24m.

Steering an auto giant

Dhivya Suryadevara became General Motors first female CFO, and, at age 39, replaced a man who had been employed by the company since before she was born.

* This content is produced as part of an editorial partnership with the CFO Summit and Awards.

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