Are CFOs The New CEOs?

The job of the CFO has gotten increasingly sexier with the passage of time. The Chief Financial Officer (CFO) is no more the company ‘scorekeeper’ as was once the popular perception of the post. He is in fact the ‘key strategist’ responsible for the most important acquisitions or a string of cost-saving measures that turn around a struggling company. He, therefore, personifies the company’s perspective and discipline. Very often, more than the CEO, he becomes the front face of the company.

Examples abound. Twitter’s Anthony Noto — the highest paid CFO in CY14 with an annual compensation of $78.2 million — was credited with driving the company’s unique revenue model. Macy’s Karen Hoguet became an icon for pulling up the retailer in the face of the massive e-commerce onslaught, and pushing key disinvestments to repay Macy’s $3 billion debt. In 2014, the CFO Journal had named her top in the class.

If you want a glimpse of the modern CFO, take a look at IBM’s Mark Loughridge. After he took over in 2004, he stitched together an aggressive acquisition strategy for the company which helped seal nearly 100 deals and by 2011 took IBM past $100 billion. He also helmed the company’s exit from the PC business in 2005, seen as a major clean up. His mix of finance and strategy made him the epitome of the modern CFO earning him WSJ’s crown for the best CFO in 2012.

So is the CFO the No. 2 guy at the staging post to become the CEO? Surveys indicate that the CFO has an independent and unique role. The Economist Intelligence Unit’s survey of over 600 CFOs from all over the world, including India, showed that 73 per cent wanted to remain in that role, and become bigger and better CFOs.

Having said that, it isn’t that CFOs don’t aspire to become CEOs; and many of them do reach that final step on the corporate ladder. The most significant is the career graph of Indra Nooyi, who joined PepsiCo in 1994, was elevated as CFO in 2001 and made the final cut as CEO on the back of great acquisitions like Tropicana and Quaker Oats in 2006.

For BW Businessworld, this is the first time we are presenting the YES Bank-BW CFO Awards, featuring the best of India’s financial strategists. It has been a rigorous process — the Yes Bank-IPSOS market research team first distilled the BW 500 list to come up with 139 companies in the race and then shortlisted it down to 35. The final 14 ‘Champion CFOs’, decided by a distinguished jury, has some great names — P.B. Balaji of Hindustan Unilever, who won not only the Best MNC (Large) CFO award, but also recognition for his sustained value creation through CSR work. The other big hitters included Gopinath of TCS, the overall ‘Champion’ CFO; and Naresh Bhansali, CEO & CFO of Emami. Editorially, the work was anchored by senior editor Ashish Sinha and special correspondent Monica Behura.

On another front, with Aadhaar being made mandatory comes the danger of increased snooping by ‘Big Brother’ and the consequent erosion of citizens’ privacy. Neville Roy Singham, founder and CEO of IT consultancy firm ThoughtWorks and one of US’ Ed Snowden’s supporters, told a Mumbai audience in 2013 that US security agencies had gleaned 97 billion bytes of information hacked from millions of Internet users and digital device owners, of which 20 per cent was sourced from India and Pakistan. As cyber access to people’s lives and habits become more accessible to governments, what are the legal and personal implications? Abraham Mathew, former journalist and lawyer, examines the subject in detail.