There was a noteworthy article in the August 17^th edition of the Wall Street Journal.  It was buried at the bottom of page R5 and the writers were Philip Tulimieri and Moshe Banai.  I don’t think the writers realized how on target they were in that article when they suggested the time is right for the CFO to be a “Co-Leader.”  An excerpt of their article reads as:

“The chief executive as visionary leader is a thing of the past.  It’s time to make room at the top for co-equals: leadership by the CEO and the CFO-with equal authority and accountability.  At the start of this decade, billions of dollars were lost in a series of corporate scandals marked by fiscal mismanagement, fraud and outright greed on the parts of CEO’s, CFO’s and other senior executives.  The public and legal backlash gave rise to new thinking about the ways companies should be organized, managed and governed, placing greater emphasis on accountability, regulation and transparency.  New regulations were passed, including the Sarbanes-Oxley Act, which thrust the CFO into the forefront of the boardroom and helped create a new balance of power between CEO and CFO.”

Over 200 years ago, our founding fathers had the insight and forethought to build a political system that had 3 separate branches (Legislative, Executive and Judicial).  While under the rule of the British King, they understood the problems that would occur having just one person making all the decisions.  They realized that there needed to be a system of checks and balances so no one person would have supreme control over the actions of the government.  So if these beliefs are so entrenched in our political system, why have they not been accepted into our business practices? 

It’s an interesting study of the dynamics of the people who perform those duties.  Traditionally, the CEO comes from a background that is Sales and Marketing oriented with focus on the growth of the business.  They are usually more of a risk-taker and while concerned about the financial results of the organization, they are more concerned about market growth, earnings per share and shareholder satisfaction.  The CFO, on the other hand, is typically more conservative in their ideals and approach to many business decisions.  They have always been the “keeper of the books” and were accountable for the protection of the Company’s assets.  While their role included growth of the business, earnings per share and shareholder satisfaction, they needed to be sure that these goals were not being compromised at an unacceptable level of risk or greed.  Theoretically, the Board of Directors is also responsible for the actions of the CEO.  Sarbanes Oxley has truly forced added accountability onto the Board.  However, in some cases, the BoD may have been partially picked by the CEO or they may not have enough direct involvement in the day-to day activities to fully understand all the ramifications of the CEO’s actions.

Granted, there’s no such thing as the perfect system.  However, our political system has proven time and again that when there is proper segregation of duties, which include appropriate checks and balances, results are more often controlled and individual accountability rises to the surface.  In many cases, it’s the constant interaction and combined accountability that forces each party to a higher level of performance.  Why not have an executive “team” run the Company?  Is the CEO that much smarter or more accountable than the President of the United States that he doesn’t need a peer?  Who’s there to steer the ship when the Captain goes off course? 

CEO + CFO….maybe the day is coming.