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Get Out in Front

Now, more than ever, finance chiefs must be visible, forthright -- and ahead of the curve.
Marie LeoneAugust 14, 2002

In the bull market of the Clinton Administration, the role of the chief financial officer underwent a dramatic change. Long considered numbers-cops, CFOs suddenly found themselves thrust into the corporate limelight: talking to Wall Street analysts, heading up strategy committees, scouting out acquisitions, and structuring billion-dollar financings.

Now, that role is being questioned. With the recent spate of high-profile accounting scandals — Enron, WorldCom, Global Crossing — CFOs have been pilloried by press and investors alike. A recent article in The Economist went as far as to suggest that finance chiefs should return to the role of bean-counter.

That’s not going to happen. Instead, as corporate integrity takes center stage, finance chiefs will be asked to assume a slightly different role — that of truth-teller. Indeed, in the coming years, the CFO will likely be the one senior executive relied upon to deliver what investors and analysts seek: simple, unadorned facts.

Such an assignment might qualify for hazard pay, particularly with the shells being lobbed at finance executives these days. A sputtering economy isn’t likely to elevate the spirits of the investment community, either.

But in this ugly climate, consultants say finance chiefs must absolutely avoid adopting a siege mentality. Explains leadership psychologist Susan Battley: “Taking a defensive posture is counter-productive.”

Battley, who runs Battley Performance Consulting, says honest, straightforward talk is a must for finance chiefs in the post Enron era. Back in the good old days (back when Andrew Fastow and Scott Sullivan were not household names), CFOs didn’t have to trumpet their ethics. Credentials, like a CPA or MBA, were enough to instill confidence in most investors.

But the new realities require that CFOs come front and center. Why? Because the scandals are financial in nature. Battley’s suggestion: don’t wait for mandates from the government; take bold corrective action now. Retreating into ‘We’ve always behaved in an ethical manner,’ isn’t enough anymore. “What was assumed,” she says, “must now be clarified.”

To that end, Battley coaches CFOs to be first movers. She has a point, too. Note that Coca-Cola recently won a PR victory by being the first marquee corporation to announce its plan to expense stock options.

(Editor’s note: See how Coca-Cola measures up against three other companies that have announced their plans to expense options — Amazon.com, AMB, and The Washington Post Co. — see the CFO PeerMetrix interactive scorecards.)