The role of Chief Financial Officer (CFO) is important in every business. CFOs need to manage all financial aspects of a company they are working for, and they have to do it exceptionally well.
CFOs are tasked to prepare financial reports and do so accurately. After they have thoroughly examined the record-keeping and all financial aspects then they report it to the stakeholders. CFOs are also required to make decisions on how manage and invest their company’s money. In doing so, they need to manage risks better. Finally, CFOs need to strategize for the future, ensuring their companies’ financial growth.
In order to become a great CFO, every person needs to have the four essential pillars of leadership.
4 pillars of CFO leadership
The four essential pillars of leadership includes the following:
1. Rigorous governance
The Chief Financial Officer needs to ensure rigorous governance, as they have to manage a number of complex processes. They are not responsible for just one task but they need to have an understanding of how different parts work within a company or an organization so that they can intervene wherever it is needed.
There is a lot of competition in the business field and the only way to go ahead of your competitors is accuracy and efficient hence the chief financial officer needs to make sure that whatever data they are producing is accurate and can be utilized by the company for its own benefit.
The second pillar of leadership that one needs to become a successful CFO or Chief Financial Officer is accuracy. They need to have an idea about finances and how important it is to achieve a precise financial close every time. The financial close is highly important in order to understand the business and the way it is likely to grow in future.
The CFO along with its financial team is to make sure that the team is not lost in the manual tasks so much that they lose track of all the post-close analysis. Analyzing the post-close analysis is important because it will help companies and organizations achieve their long-term goals.
The third pillar of leadership that every Chief Financial Officer needs is consistency. They need to be consistent enough to produce reliable information that can lead to efficient auditing which can they be utilized to create analysis.
The CFO is the one who is responsible for maintaining the integrity of the data produced. They need to come up with ways that can promote the visibility of the data produced, its security and the quality of the data that is produced. Closely analyzing the information can make it consistent thus they can eliminate the chances of any errors that might arise.
If the information produced is correct right from the start then it makes it quite easy for the employees to make important decisions that can help the company and the business grow. The CFO has the wealth of audit at their hands hence they need to be extra careful when they are documenting the finances in the form of a report.
The fourth pillar of leadership that a Chief Financial Officer needs is that they need to have a foresight that can help them foresee what type of decisions can lead the business towards a path that ensures maturity and growth in the long run. They are the ones responsible for devising a strategy that can help them identify a long-term financial picture of the company.
If the vision or strategy fails to foresee the aspects of future and how their decision is likely to turn put in future then this means that the CFO lacks the leadership pillar of foresight.
Hence all the above mentioned pillars i.e. rigorous governance, accuracy, consistency and foresight are vital for the growth of the company as well as for the Chief Financial Officer to maintain their control on the business or the organization they are working in.
CFO needs to ensure that they know how to utilize the pillars of leadership in a manner that can help them fulfill their promises. They need to develop effective strategy and they should be able to guide the business towards growth and success through various kinds of initiatives. Moreover, Chief Financial Officers need to keep their focus on aspects like cash flows, controls, costs and risks at the same time so that they can take effective decisions that can help strengthen the base of every business.
One last thing: What separate great CFOs from good ones are education and experience. Always start with education. Earn a certificate in management from an accredited post-secondary institution. Take course online. Read books. And then, Your next step is for you to embed these skills in your day-to-day decision making.