Beyond the balance sheet: Culture and ethics in finance leadership

The CFO casts a wide influence over corporate operations, making decisions ranging from how ESG-linked funding effects management practices to the pace and scale of investment in new teams. As such, they play an outsized role in creating corporate culture and fostering good ethics.

When assessing prospective CFOs, consideration of leadership skills and values should take a central role alongside assessment of functional competency and industry knowledge.

Attributes of effective CFOs

Here we explore some of the key attributes, traits and drivers that enable Finance leaders to make effective commercial and cultural impact.

  • Leadership expertise

The reach of a CFO goes far beyond their direct reports or the Finance function. Their ability to inspire good working practices will set the tone for corporate governance and business behaviour. Influencing ways of working beyond their direct team will help differentiate good managers from prominent leaders, and ultimately how the Board’s vision for business behaviours is realised.

  • Communication skills

CFOs have always been tasked with translating complex financial information to multiple stakeholders, whether internal and external, in written form or verbal. However, the way information is consumed is evolving. Social media platforms, from TikTok to Twitter, create an expectation for concentrated messaging, and consumers of financial information are not immune to these changes. In the Chief Executive’s opening review of Next PLC’s recent half-year report, it states in the opening line “This report is long”, acknowledging that the 82 page document may be heavy reading, even for their target audience. Understanding the changing demands of your audience and how to communicate to them is a critical skill of effective CFOs.

  • Ethical vigilance

As highlighted in a recent Financial Times article, the scale and influence of ESG-linked funds means that a lacklustre approach to sustainable business practices can result in public companies missing out on premium market pricing. This can position CFOs as leaders in upholding corporate ethics. When assessing potential Finance leaders, values-based evaluation is therefore crucial.

  • Regulatory awareness

The price of regulatory wrongdoing is more than just a compliance issue; it’s a balance sheet consideration. Increased public scrutiny has led to higher penalties for non-compliance and rule breaches. An example of this is in the Water industry, where a decade ago, fines were infrequently more than a few thousand pounds. Today, they often break seven figures, making this a matter that CFOs cannot afford to overlook.

Recruiting and developing CFOs

As the skills required to be a successful CFO evolve and expand, so too should the tools we use to recruit, develop, and motivate these leaders. A comprehensive interview process that incorporates an understanding of personal values alongside leadership style, is essential to ensuring that CFOs meet the increasing range of cultural and ethical demands on their role.

Our understanding of both the quantifiable and the intangible make us a valuable partner in sourcing Finance leaders that thrive in complex modern business.

For more insights on how we partner with clients to attract exceptional CFOs, please contact Matthew Taylor.

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