CFO’s Evolving Role
At the same time that risk management and increased regulatory oversight place greater demands on the CFO, the finance function continues to evolve from its traditional back office role of accounting for receivables and assets into what is best described as a frontoffice business partner. CFOs are tied into every aspect of the organization and business, from technology to human resources to benefits. The office of finance is being asked to do things that they have never done before. “In many ways, as a CFO, I feel as if we have a bull’s-eye on our back,” says Joseph M. Ramos Jr., CFO of Seibert Financial Corp. The added responsibilities place constraints on the CFO from acting as a true business partner to the executive team and bringing the focus of finance to the strategic and operational issues that face the firm. In particular, the regulatory issues almost certain to arise out of the current crisis coupled with Sarbanes-Oxley compliance will leave the CFO and finance department with even less time to focus on the business overall. “I think the virtues of SOX are great, but practically speaking, it is very difficult and expensive to maintain and to be in compliance with,” says Mr. Ramos. And where it comes to the burdens of Section 404, management’s attesting to the effectiveness of internal controls over financial reporting, he adds: “404 is a lot of work whether you’re a small company or a big one.” He finds himself addressing regulatory and compliance issues rather than tracking the business and growing it. “I like growing and building a business, rather than simply making certain that my internal controls are in place.”
The Moral Rudder and Compass to the Organization
The CFO in the evolving financial services landscape has two important mandates: to be a good and reliable business partner who enables the firm to accomplish its goals and undertakings, while acting as the moral rudder and compass to the organization. It is a unique and peculiar position, one that contains its own inherent contradictions and tensions. Some would argue that the two mandates are irreconcilable and that in the desire to act as a business partner, the CFO will relegate his responsibility as moral compass to secondary importance; or conversely, the CFO will inhibit the firm’s growth as a result of excessive caution.
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