Two Leaders in the Corporation of the Future
New Ideas on Corporate Leadership See Top Role Shared With CFO
Sep 14, 2009
The Chief Executive Officer (CEO) as visionary leader is a thing of the past, says Dr. Philip Tulimieri, a professor of management at the Zicklin School of Business in New York.
Dr. Tulimieri believes that the Chief Financial Officer (CFO) should also have equal billing and responsibility for corporate leadership. Tulimieri says his research suggests that the distinction between the two roles is blurring and that changes in corporate structure and in society at large indicate that the two roles are merging in many ways.
Growing Complexity Discourages Traditional Corporate Leadership
Traditionally, the role of the CFO is to create strong financial foundation for the business to grow on. This may put the CFO in opposition to the CEO if the long term plans put the company’s finances at too much risk.
High profile cases of fraud and mismanagement among senior level executives at a number of corporations in the last decade have put the CFO at the forefront in the boardroom, says Tulimieri.
The legal and public backlash against these cases has generating new ideas about how companies should be managed with more emphasis on accountability than ever before. The need for transparency in business dealings has created a change in the balance of power between the CEO and the CFO.
As well, Tulimieri says, the forces of globalization have created a confusing and complex set of responsibilities for corporate leaders.
Corporate Executive Leadership Can Be Divided
The two positions of CEO and CFO while very distinct in duties tend to be recognized now as "necessary counterforces" in the business structure, says Tulimieri. The CEO is the "eternal optimist" leading the way and the CFO is "the realist" being cautious and warning of risk.
The two roles, both addressing the need for growth and responsibility, must function as a team rather than adversaries.
“The top job has simply become too large, too complex and too demanding for one person,” Tulimieri says, suggesting that younger employees are more comfortable in a non-hierarchical environment. “A CEO-CFO partnership will provide the engine for this new-millennium corporation, and serve as a starting point for the new corporate model of ethical behavior, sustainability and true stakeholder value.”
While admitting that there is always the possibility of disagreements between two strong-willed people, Tulimieri feels that there is much to be gained from such a joint partnership.
He feels that the additional perspective and expertise brought by the partnership will aid in decision making. As well, more energy can be drawn from joint leadership that can aid in ensuring plans are concluded successfully. And, in the case of irreconcilable disagreement, Tulimieri points to other organizations where appeals can be taken to a higher independent authority, or to the board or a subcommittee in a public company.
Source: Move Over CEO, MIT Sloan Management Review, August 2009
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