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Many CEOs believe they have a clear understanding of what makes a strong CFO. However, even the most experienced leaders often overlook key signs of what effective financial leadership truly entails. Very often, this might lead to CEOs judging CFO performance. If this happens, it’s essential for chief executive officers to recognize the significant value a chief financial officer brings to the business and the long-term implications of their decisions.
The CFO Role Goes Far Beyond What Most CEOs Expect
It’s easy to assume that a CFO’s job is mostly about tracking income and expenses. In reality, their role is much more complex. A great chief financial officer acts as a strategic partner to the CEO. They help shape company direction, manage risk, and ensure that financial decisions are aligned with business goals. When chief executive officers focus only on financial reporting or cost controls, they may overlook a CFO’s impact on the future of the business.
A Strong CFO and CEO Relationship Supports Smarter Growth
One mistake many chief executives make is believing that a CFO’s main job is to say no. While being careful with company spending is important, a strong financial officer does more than tighten the belt. They look for opportunities to invest wisely, evaluate new business ideas, and create systems that help the company grow. When the CEO and CFO work together with a shared long-term vision, the company is better positioned to scale with confidence.
Forecasting Is Never Perfect, and That’s Okay
It’s critical to establish strong CEO CFO communications to avoid unreasonable expectations. For instance, CEOs sometimes expect their financial officer to produce perfectly accurate forecasts. But financial forecasts are based on assumptions, and even the most well-researched models can’t predict the future exactly. Markets shift. Customer behavior changes. Global events happen without warning. What matters is not whether the forecast was perfect, but how the CFO responds when things go off track. Can they adjust quickly? Can they explain the change clearly? These are signs of strong financial leadership. Taking this approach is a good step in avoiding CEOs judging CFO roles at work.
Communication Between CEO and CFO Is Often Undervalued
A good CFO does not just analyze numbers. They must also explain those numbers to people across the company—some of whom may not have a financial background. If CEO to CFO communication doesn’t effectively break down complex ideas into clear language, their insights may be lost. CEOs should consider how well their head financial officer communicates, not only to them but also to board members, department leaders, and outside investors. Clear communication strengthens trust and drives better decision-making.
A Quiet CFO Might Still Be Driving the Business Forward
CFOs are often behind the scenes. Unlike a head of sales or marketing, their successes may not be immediately apparent. But that doesn’t mean they aren’t making an impact. A chief financial officer who improves cash flow, builds better reporting systems, or prevents a bad investment from happening might not ask for credit, but their work still matters deeply. CEOs should look beyond visibility and pay attention to the structure and stability a good CFO provides.
Frequently Asked Questions About How CEOs Judge Their CFO
How often should a CEO formally evaluate their CFO?
A formal evaluation should occur at least once a year, but ongoing conversations are equally important. Regular check-ins about strategy, performance, and team dynamics help avoid surprises and create space for growth on both sides.
What should a CEO do if they feel their CFO is too risk-averse?
It’s important to open a conversation before making assumptions. Ask how the CFO is weighing risk versus stability, and what data is guiding their decisions. A good CFO should be able to explain their approach and suggest ways to explore opportunities without compromising financial health.
Can a CFO help shape company culture?
Yes, especially in areas such as accountability, transparency, and decision-making. When a CFO leads by example (communicating clearly, owning mistakes, and offering solutions) they can influence how other leaders operate too. Alternatively, CEOs judging CFO roles in business can lead to systemic problems.
Is it common for CFOs to need outside support or guidance?
Absolutely. Even experienced CFOs benefit from outside insight, especially during periods of growth, restructuring, or investment. Partnering with a firm like TGG Accounting can strengthen your CFO’s capabilities without needing to replace them.
What’s a red flag CEOs often overlook when it comes to CFO performance?
Lack of forward thinking. If a CFO is only reacting to problems and not helping to plan ahead, it could mean they’re stuck in day-to-day operations. A strong CFO should be proactive about what’s coming next, not just what’s already happened.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
