Proactive and powerful - the new CFO.

• Author: Maisel, Lawrence S.
• Position: Chief financial officer

Proactive and powerful--the new CFO The pace of takeovers and buyouts seems to be slowing as we move into the 1990s. Does that mean top management no longer will have its feet held to the fire to improve corporate performance? Hardly.

Global competition is turning up the heat every day. Just ask U.S. automakers. Although the Big Three continue to make significant improvements in the quality of their cars, the "quality gap" with Japan is perceived to be, if not actually, widening. As one auto analyst told The Wall Street Journal recently, "The domestics improved, but the trouble is that the Japanese improved so much more. The Japanese have become a moving target."

Staying competitive in a world full of moving targets will be the challenge of the 1990s, just as corporate restructuring was the challenge of the 1980s. To help meet the challenge--and lock onto those moving targets--companies are now demanding broader, more sophisticated performance measurement systems. And they are turning to the chief financial officer to implement those new systems.

That's one of the things we learned from a recent survey of CFOs of multinational corporations conducted by KPMG Peat Marwick and Business International, the research firm affiliated with the Economist Group of London.

We think the survey findings carry a number of important messages for financial executives at all levels.

The most fundamental message is that the role of the CFO has changed. Traditionally, the CFO's stance was more reactive than proactive. Now CFOs are being challenged to go beyond the reactive assessment of financial results and become involved in a much broader way both in operations and in strategic decisions. Top management expects the CFO to play an active, expanded role in helping to enhance corporate profitability and competitiveness.

CFOs, where do you stand?

Look at what our survey found about the changing role of the CFO:

* Nearly seven out of 10 CFOs say their involvement and influence in operating decisions has increased in recent years. The top goal of CFOs is now helping to set strategic direction and deploy corporate assets effectively. They give it much more emphasis than they do traditional finance-function responsibilities. (Look at the chart on page 14.)

Accordingly, CFOs say they allocate as much of their time to assisting the chief executive officer and other senior management (40 percent) as they do to managing the finance function. And as a consequence they are delegating more authority to their controllers and treasurers.

* CFOs in turn are...