When it comes to board-level relationships, most would agree that the critical CEO/CFO partnership stands head and shoulders above the rest.

Often the unofficial second in command, the support provided by the CFO to the CEO is multifaceted and serves many purposes. Nuances aside, get it right and it is a formidable pairing that lays the foundations for business success. 

Best friend but severest critic

ICAEW member Caroline Gardner was until recently divisional CFO at Amex Global Business Travel and has held a range of CFO roles over the course of her career with organisations including Jimmy Choo and Travelopia, a specialist travel division of TUI. 

“It is one of the most important relationships because you've got a CEO who’s got the strategy in mind and they’re normally very keen to grow or transform the business,” Gardner explains. “The role of a CFO in relation to a CEO has always been best friend, but severest critic. The CFO is the one who’s got to say it like it is because they’ve got all the data at their fingertips.”

Sometimes that’s about being able to say ‘no’, but also explaining why and coming up with alternatives. Having the gravitas to do that hinges on an in-depth understanding of the whole business, not just the financials, underpinned by data insights, Gardner explains. 

“CEOs may have their own version of the truth and it’s the role of the CFO to make sure they’re grounded in reality at all times. The ability for a CFO to critique a business case, for example, and understand what it means for the business is a very important role.”

Clearly articulating complex information

Similarly, the ability to clearly articulate often complex financial information has never been more important. “Accounting rules can make a difference to the way your results look. Being able to explain those things in a simple way is important,” Gardner says. 

However, the type of support that the CFO provides to the CEO is becoming increasingly multifaceted. Today, it’s not just about the numbers, it’s about providing trusted advice in the broadest sense, including strategy and the bigger picture long-term mission and vision. 

It’s a remit that typically includes Identifying and managing organisation-wide risks and people strategy. From a succession planning perspective, too, the well-rounded nature of the CFO’s remit is another reason why the CFO is often the obvious choice to step up into the CEO role. 

Pre-empting tomorrow’s problems

At the same time, it's not just about tackling today’s challenges, but also pre-empting the problems of tomorrow. “The role of the CFO is to think about that three- or five-year plan and how you get there. You’re the one whose team is coming up with models of how it might look in the future and the CEO is going to be the one presenting that to the board. You need to be in there with them and making sure the plan is robust and well thought through,” Gardner says.

The importance of the CFO/CEO partnership means having the right chemistry is essential. “As the number two to the CEO, does it come across that way to everybody else on the board? Are you consistent in your messages? Both the CEO and the CFO will have different touch points with the business and with stakeholders, and you need to be in tune,” Gardner says. 

Not surprisingly, soft skills – communication, influencing and negotiation – and strong emotional intelligence are critical to both nurturing the relationship and having impact more broadly. “Being able to deal with egos is important because, let’s face it, most CEOs don’t get there because they’re shy and retiring,” Gardner says.

Resisting pressure to automatically agree

Exposure to a mix of different personalities and styles of working can be helpful in developing those skills. “I’ve had a lot of very different experiences and typically changed roles every two or three years. You learn how to deal with different types of people,” Gardner adds.

Disagreement is inevitable in any organisation, and a differing viewpoint between the CFO and CEO is a healthy part of the working relationship. As CFO, the ability to stand strong during decision-making is important, says Kathy McDermott, CFO at Bidvest Noonan.

“That comes down to a trusted relationship where there is no pressure to agree. If it gets to that stage, it negates the purpose of having the two roles in a business,” McDermott says. “Independent thinking, confidence, trust and resilience are very important because if you have a differing viewpoint, you need to be comfortable with that.”

A joint vision

The pressures that come with the cyclical demands within finance together with the demands from the business are not to be underestimated, McDermott says. “You’ve got to balance the vision for growth and success with what is possible and what is not, and ultimately what the bigger priority is. 

“There's got to be an agreed belief in the business and the strategy. It’s not one person’s vision. It must be something that is co-created at a senior management level,” she says. Also, forging strong working relationships with other executive committee leaders is important.

A coming together of minds

David Sayers, a partner in the financial officers practice at headhunter Green Park, says the critical nature of the CFO/CEO relationship is a view also shared by many CEOs. “They are acutely aware that their plans for change, transformation or growth hinge on the ability for these two minds to come together and provide simplicity of thought to a variety of challenges or opportunities.”

No wonder, then, that when a new CEO is appointed, the appointment of a new CFO often follows. “The desire for a CEO to appoint their own CFO is underpinned by a desire first and foremost to bring about change. What they want from their CFO is someone open to change and who isn’t held back by the legacy of past operations and culture,” Sayers explains.

That’s not to say existing CFOs can’t adapt to a change of CEO, but the secret to doing so is an innate understanding of the intricacies of that relationship and the expectations of the role, notably the ability to provide complementary skills over and above financial control and reporting, Sayers says. Above all, it’s about gaining the trust of the CEO and the board.