A growing number of chief executives now view their own finance chiefs as a potential threat to their job security, reflecting sharp changes in corporate power dynamics.
Boston Consulting Group conducted its first CEO Insomnia Index study, which found that 26% of CEOs surveyed considered their primary financial officer to be the biggest threat to them because they ranked this officer above all other executives.
Why do CEOs now see the CFO as their biggest threat?
The study, which collected data from nearly 500 CEOs working in businesses with annual revenues between $100 million and $5 billion, showed increasing pressure on executives and increasing conflicts within organizations.
The research demonstrates how the role of the chief financial officer now serves as an important component of organizational strategy development and decision-making processes rather than maintaining its historical function of financial control.
The current economic environment, including rising costs and increased artificial intelligence spending, has made CEOs increasingly dependent on CFOs for both future analysis and operational implementation.
Jody Folds, global chief operating officer of corporate finance and strategy at Boston Consulting Group, explained that both parties maintained a relationship that was mutually dependent on a deep level rather than facing direct competition between them. The CEO has full responsibility for all consequences that occur if the financial strategy fails, so both positions need to work together to achieve success.
“CFOs are no longer just backward-looking bookkeepers,” Foldessi said. “They are increasingly involved in shaping strategy, analyzing scenarios and guiding key business decisions.”
The growing influence of the organization creates more opportunities for public exposure. CFOs build their reputation with boards through regular meetings in which financial results and projected results and potential threats to the organization are discussed, which enables them to position themselves as suitable candidates for executive leadership positions.
The practice of succession planning exists as a standard procedure; However, organizations need to keep an eye on how impending succession to the CEO position creates additional stress for existing CEOs.
The external conditions that officers face on the job currently create significant stress for them. The report found the average CEO stress level to be 66.7 out of 100, which is considered high.
According to one CEO, the top concerns for CEOs include three main factors, including growth expectations, cost control and increased board scrutiny, adding that they need to demonstrate greater competence now compared to two quarters ago.
