CFO authenticity and the skills of leadership.

• Author: Cunningham, Colleen
• Position: President'sPAGE - Chief financial officers

The Sarbanes-Oxley Act and the myriad of interpretations that followed in its wake have had a profound effect on CFOs today, not the least of which is demanding a level of leadership skills that may not always have been needed before. While CFOs in the past few years have been moving beyond a purely financial role and assuming a more strategic function, the new regulatory climate has thrust them to the forefront.

With the internal control environment becoming such a critical focus for companies, the CFO--who is, after all, the one who best understands that environment--is now assuming a more conspicuous role with the board and in company operations, and is ensuring that outside stakeholders have a deep understanding of the firm's internal controls. He/she is uniquely positioned to create and nurture the culture of accountability within the organization that the regulation demands. This responsibility, coupled with the increased focus on strategy-setting--which had become part of the CFO's role even before the Sarbanes-Oxley Act emerged from aftermath of corporate scandals--has placed today's CFO in the ideal place to progress to the CEO role.

As such, the CFO today faces unique challenges, perhaps the biggest of which is resources. CFOs have ever-expanding responsibilities, brought about principally as a result of Sarbanes-Oxley's emphasis on transparent reporting and documentation. Ensuring that they have the right resources to do the job--and maintaining an appropriate level of motivation along with those resources--has become a top-of-mind issue for most CFOs.

Support a Culture of Accountability

It is also vital that CFOs ensure that the company's systems and processes support a culture of accountability. Employees must feel connected to the strategy of the organization, in a way that is meaningful to them and that motivates them to do the right thing.

A major part of the CFO's role as the financial leader is the development of his/her employees. To do that, he or she must be capable of earning their respect, and must possess "authenticity." The trait of authenticity--perhaps the most important characteristic of a good leader in the finance function--comprises competence and integrity, plus the ability to garner the respect of others.

And, the "others" comprise a wide circle. Financial executives today must have the ability to motivate their staffs and understand the operations of the business, as well as the control environment, and...