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CFO Performance Reviews

CFO Performance ReviewsWhat key things should a CFO be measured on?  I used to think company performance plus qualitative progress on the key initiatives they own.  BUT what happens if you are working very hard and achieving results and driving initiatives forward and the company is not performing overall?  Especially since we don't own sales.  In these tougher economic times I am curious how you are being treated as CFO's in the performance and comp review process and how have you presented this to your CEO?  Thanks.


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

You are correct with your statement - " performance plus qualitative progress on the key initiatives they own." You can hit a home run on your initiatives, but if the company does not perform well, an incentive target % of a smaller pie or non-existent pie will minimize your contribution. If your compensation is written to benefit you on the upside, you also are penalized on the downside.

(Agent, JKS Solutions, Inc.) |

I would like to re-frame your perspective related to your assumption that "we don't own sales" and offer you a new pattern of thought that you will be able to apply immediately and hopefully reignite your ability to recognize where you indeed have the ability to influence.

Finance - Assesses potential and inspires appropriate direction while mitigating risk. The function is dual, both enabling and supporting with a warning system. Many get stuck in the supporting role because they do not understand leadership.

You may not own the functional duties of sales, but the CEO does and the CFO is the CEO's closest advisor in all things related to the business. That you can take to the bank. Being the closest advisor puts you in the driver seat for all strategy decisions, operational or administrative.

If you are feeling like you cannot influence the sales team directly, that is correct. They report to the CEO or COO. And who does the CFO influence? The CEO and the COO.

You don't need direct sales experience to create influence. The CFO has the ability to investigate sales training programs and benchmark the effectiveness of current practices vs the competition. The CFO has the influence to point out to the CEO and COO where there is a blind spot in the market.

The CFO is in charge of the external relationships of the business and strategy related to those relationships. The Controller is in charge of accounting process and all internal relationships to with accounting. Sometimes people are promoted without a clear understanding of what being promoted to CFO means. Sometimes CFOs believe their job is accounting or management of accounting. It is not.

The CFO determines feasibility and viability of all budgetary proposals, along with assessing the vulnerabilities of poor plans of action offered by the operations leaders. That means The CFO has the ability to ask ops and the COO to go back and reformulate their objectives and create plans of action that will lead to better results.

I can't think of anyone in the company who has more direct control of the budget or the decisions leading to effectiveness of strategy than the CFO. If you feel you do not have this level of control, its time to reexamine your outlook.

When the company is experiencing a downturn, your performance is linked to that impact. Why? Because you are the trusted advisor of the CEO and your ability to influence the company and all its parts to achieve success is in your control.

The CFO is not out of scope by suggesting that a new director of sales and marketing is needed to replace the failing strategy of the current one. The CFO is able to influence who the current leaders should be, and who should be acquired from a successful competitor. This is War, and the CFO is one of the Joint Chiefs.

An under-performing CFO will be replaced. The CEO job is political and it cannot play favorites, but it does evaluate the effectiveness of all the Chiefs and if any Chief requires too much assistance to get things done, they will be replaced. And you can assume that the CFO's role is similarly political with respect to its own influence of the finance and accounting function. The same rules apply.

If the CEO is not digging into the issues you perceive, you have not armed them with the intel or weaponry to surmount the obstacle AND retain political face with the other leaders.

Go forth, manage up, be courageous, your influence is expected. Yes there will be political obstacles, it is your job to find the alliances that will surmount the obstacles.

Leadership is about taking action that leads to strategic execution, not waiting for approval or permission or for everyone to play nice and share their toys. Humans don't share their toys or play nice.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |


While I don't disagree per se with your outlook on CFO life; at what size company do you see this CFO working (in/at/for)?

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

Wayne - Excellent question. If the company is a closely-held private company, the CFO many times has no ability to control what the CEO does. Nor does the Controller have the authority to do this. There are organizations, especially SME that are closely held, where the CFO, Controller, and entire finance team carries the proverbial shovel in the parade. Family owned businesses are the same way.

A question I have for Mr/Ms Anonymous is not only the questions you posed, but what is the CEO's, COO's, approach to business? The tone at the top of the organization is key. How are management decisions made?

To Robert's comment, the CFO may have the overall biggest impact on the organization's performance, but when the CEO takes charge of all things in the company, and insists on doing the work their way, the CFO's responsibility may become to clean up the messes being made, and salvage what can be.

It is still nice to see what may happen in companies that I may one day work. Reading these comments have given me a better understanding of what should be the norm.

(Agent, JKS Solutions, Inc.) |

Hi Wayne,

What size company? For any size company that employs a CFO.

I have worked in small companies, very large companies, and have consulted to many. The formula works for all.

You don't mention your reasons for disagreement.

In leadership, you decide the way, set the tone, and decide how others will treat you. The title means little unless you back it up with actions and confidence and meaningful results.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |


Like I said I don't disagree, however, I have seen the CFO boxed out of sales, not considered the closest advisor, so the application is not always (though it should be) straight-forward.

Robert Fetterman
Title: Chief Financial Officer
Company: Oneida Nation
(Chief Financial Officer, Oneida Nation) |

I agree with Valerie that the CFO does have a big impact on overall organizational performance, especially where the CEO relies on the CFO in a strategic or operational leadership role. Some CEOs are looking for the CFO to be in a more traditional finance role, especially in smaller organizations.

The CFO in either case has a large responsibility for the important finance function, which oversees many critical organizational processes. The CFO should be driving forward changes within this team supporting the CEO and organizational goals. This means managing finance managed costs or income (including financing and bank fees, investment returns), better managing assets or debt (cash management, AR days outstanding), improving finance processes (reducing close cycle times, improving reporting), driving improvements with operating departments (margin improvement opportunities), and implementing new projects (new budget system, strategic planning modelling, new ERP system). These should be quantifiable goals.

A mix of finance objectives and overall organizational goals I think is best practices for many companies.

Irv Williamson
Title: Owner
Company: Growth Guidance Solutions
LinkedIn Profile
(Owner, Growth Guidance Solutions) |

While I feel human beings can play nice and still be effective, Valerie got it 100% right. She is describing the difference between a real CFO and the accounting manager who flatter themselves with that title. I have seen too many CFOs who don't take responsibility for the business' performance. Large or small company, the CFO not in lock step with their CEO is simply working for the wrong company.

Elianna Dzubur
Title: Director of Finance
Company: TekTegrity
(Director of Finance, TekTegrity) |

I 100% agree with Valerie. If you don't think of each department as parts to 1 whole, you are missing the point. The CFO can't control everything that contributes to the company's bottom line directly but it goes both ways. The CFOs Sales counterpart (VP of Sales or other equivalent) also doesn't directly control everything that affects their ability to grow sales. For example if they aren't given timely closed financial reporting from Finance, they are likely not making the best decisions on changes to sales strategies etc. If finance mismanages cash flow, sales may be unable to hire or train in their department as needed to grow revenue. Bottom line is a company is one entity with many moving peices (hopefully moving in the same direction) and it makes sense to have incentive based pay share just as much of the downsides as they do the upsides, in all departments. Some incentives can be directly related to department initiatives but the majority should be related to how the company is working as a whole.

Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

First, a good practice is including this issue in a CFO contract/employment agreement. The agreement should lay out the foundations (even general) on the purpose of the hire and the necessary criteria for evaluation (performance reviews) purpose. Addendums can be easily made on a 2-5 year plan for the position.

Second, on a yearly basis, OKRs should be established/made for the position. (i don't think I need to emphasize that the OKRs need to be in line with company strategy) There are just too many variables in company performance and the CFO cannot be held responsible for all of them or used as a performance gauge.

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