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In this module’s case assignment we are going to take a look at Chief Finance Officers and whether or not they are best suited to move to the Chief Executive Officer position. In the next section we will look at concepts of present value and application of certainty cash flow. Niccolo Machiavelli once said “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things (Favaro, Paul. “Making the Leap from CFO to CEO”, Financial Executive OnLine Edition, Nov 2001, http://www.favaro.net/publications/cfo-to-ceo/CFOtoCEO.htm)”. In his article Paul Favaro identifies three skills necessary to be a good CEO. The first skill being CEO’s must be able to handle a faster paced less controlled job. Secondly the CEO must be able to say “the buck stops here”. And lastly a CEO must always be motivated. So what does he mean by each of those skill sets and what does it ultimately mean for CFO’s who are also would-be CEO’s?
First and foremost CEO’s are decision makers. Being trained in the military, I know that even the best decision, based on all the facts at hand, after considering everyone’s input, cannot turn back time. In the end you have to make the best decision you can with the information available in time to make a difference. In my opinion this is a strike against the CFO. The CFO is likely used to having time to collect the information and prepare the report used to make the decision.
Second, “the buck stops here”. For the over eleven years now I have been an officer in the Air Force. I have always been taught that as the officer you have to have the mindset that you are the first line of defense and anything that happens below you is ultimately your responsibility. As a junior officer you gave suggestions to your boss and let the decision be made above you. But as I have moved up the ranks more and more decisions are my...