Category: Respect

CFO Folklore: Frustrating and Demeaning Mistrust


The “Hands-Off Micromanagement” style  so prominent in many business owners— and defined in my September 21, 2010 post —has a lot of implications in daily lives of CFO’s and Controllers.  One of the most frustrating facets has to do with petty mistrust. 

I’ve got volumes of stories illustrating this particular trait of a CFO vs Owner relationship.  Here is a compiled rendition of a rather frequently recurring Tale of Mistrust from the CFO Folklore.

AlphaOmega Inc. is a treasury-intense company and its CFO devotes big chunk of his time managing it.  He personally decides on daily basis whether the company needs to borrow to cover operational deficit or invest the excess of available funds.  He is singly responsible for signing financial instruments, including multimillion-dollar letters of credits and commercial loans paid directly to suppliers.  He electronically hedges foreign currencies, sometimes  as much as $1 million per transaction.  His discounting customers’ trade documents  on London Forfeiting Market frequently reaches $20 million per tranche.

Carrying all these monetary responsibilities makes him especially meticulous about the separation of duties and internal controls.  None of the transactions he personally conducts are recorded by him.  He deliberately never cuts any checks.  He has a designated treasury operator setting up all the wire transfers.  The companies books and records are regularly audited by lenders.  And his quarterly and annual accounting audits are always clean and produce unqualified opinions.

And yet…  he has no authority to sign a $1 check or execute a $10 wire transfer release.  Only the Boss can do that. 

And this Boss is not available for you whenever you need him: the business frequently takes him abroad; May through September he is in his summer house; he has to spend holidays with his kids; and he has a girlfriend (you know, afternoon delight and all that). 

Moreover, he hates signing checks and keeps ignoring that thick folder the AP manager put into his in-box two days ago.  And every time the CFO sends a “pleeeease-release-wires” email, the Boss acts like he is asked to grant a personal favor.  And it is the CFO who has to deal with the frustration of vendors and suppliers waiting for their payments. 

The situation drives him crazy and causes perpetual frustration and anxiety.  Swallowing his pride and ignoring the insulting pettiness of such mistrust, the CFO addressed the issue many times, sticking strictly to the damage the situation causes the business.  He explained on numerous occasions that the way his internal controls are set up, it would require his entire stuff to be part of a scheme to steal even a dollar from the company.  He also explained that their treasury systems allow to set up limits of execution authority and that the Boss shouldn’t be bothered with $2,000 wire transfers.  

All falls on deaf ears.   So, the poor CFO still chases his boss somewhere in Hong Kong, begging him to release today’s wires before the banks’ cutoff time of 5 pm EST, which is 6 AM tomorrow over there.


Valuable Advice by HR Capitalist


I highly recommend this yesterday's post from HR Capitalist.  His behavioral insights are applicable to everyone in a senior management position, including all CFOs, Controllers and other financial professionals.

Leadership Means You Cut Out the Negative Body Language… 

A Canadian Blogger Jailed in Iran


Even though the topic of this AOL News Article Iran's 'Blogfather' Sentenced to Long Prison Term is not related to the topics of CFOs and Controllers' frustrations, it is related to the freedom of expression issues that concern all of us. That is why it should have its place in the spotlight here.

I don't want to diminish the severity of the sentence and the horror of what Mr. Derakhshan is going through in Iran as the result of expressing his thoughts and opinions in cyberspace.  However, essentially everyone who publishes honest and edgy, or even boring and banal, material on internet are exposed to unpredictable consequences. 

In one article, or post, or conversation after another, we are warned that prospective and current employers are searching internet for possible controversial material on you.  So do the political opponents, educational institutions, investors, country clubs, religious congregations, etc, etc. Here is a typical example of such warning provided by the CEO of TheLadders.com Marc Cenedella in his new book "You're Better Than Your Job Search": In a Google World, Prepare to Be Investigated.   Jail sentences in foreign countries are extreme and rare incidents, but we do learn that people get fired, rejected and harassed because they express themselves.

That is the reason so many bloggers are writing under noms de plume.  That is the reason so many people who have something to say don't write at all.  That is the reason I guarantee 100% anonymity to anyone who shares their professional experiences with me. 

And it does not apply just to cyberspace.  One of my future planned posts will address my favorite topic – something I call the Bill of Rights in the Workplace.  There is a reason the new great American masterpiece from Jonathan Franzen is called "Freedom."  Obviously, it is a concern.

And of course, I disagree with Mr. Derakhshan's politics.  Moreover, I am a life-time student of World History and it seems inconceivable to me that any private citizen without diplomatic immunity would actually accept an invitation from any organization sponsored by an authoritarian government.  History is full of actual repatriation incidents that sound like horror stories: China, Russia, etc.

Nevertheless, my disagreement with his ideas, does not mean that I will not support this writer's freedom of expressing them with all my heart.  It's like what Voltaire said, "I may disagree with what you have to say, but I shall defend to the death your right to say it."    


The Ethicist Randy Cohen Talks About Your Boss


You worked real hard day in and day out.  You applied yourself to the very best of your abilities.  Finally, you have reached the senior/executive management position.  Now, you are the CFO, the Controller, the Director, "the right hand," "the most important person in the company without the title" – it doesn't matter what they call you: you've achieved it.  And it's irrelevant that the business is small – in this small pond you are a big fish.Does this mean that now you can tell your boss, the owner of the company, to stop watching porn on your computer after work and leave it on overnight?  Even my favorite columnist Randy Cohen, cannot give you a clear answer in his response to one of our peers' query in June 27th New York Times Magazine - The Ethicist: Porn in the Office.He is trying, though: yes, it is not right that the boss doesn't close the browser, that he leaves it for the next user to see, but he doesn't really do anything illegal either, etc, etc, blah, blah, blah… 

The point is that our dear entrepreneurs do not separate themselves from their businesses.  They treat their place of work as their second home: watching porn, meeting with their friends, letting their kids and pets run around.  This could be a $200 million business you helped to build, but THEY REALLY DON'T CARE WHAT ANYBODY THINKS.  It wouldn't even come to their minds to consider the possibility that somebody may be offended, or simply surprised, by the images on the computer screen.  And it is not about porn.  It's one thing today and another tomorrow – the principal (pun is always intended) attitude is always the  same.

And the unfortunate truth is that no matter how important you are to the company, you cannot criticize them, because they will never forget it.  They will hold the grudge forever, because subconsciously they feel that they are untouchable royalty in their little kingdoms and NOBODY dares to point out their shortcomings.  And if you are experienced and shrewd enough, you will not say a boo (neither would I).

So, here you are, frustrated out of your mind by the unbalance between your professional achievements and organizational position on one side and inability to exercise your personal freedom on the other.  All I can advise you to do at this point is to pick your favorite from my list of coping devices listed in One CFO's Personal Tools for Frustration Relief. That's all you can do.

CFO Folklore: Why Do I Work So Hard?


People are frequently surprised by my dedication to the job.  And I have to admit, my level of commitment, loyalty and work ethics is quite high.  Some even think that I have a stake in the company or am related to one of the owners.  But no, even though a CFO, I am just an employee.  Moreover, I have advanced my career by moving from one company to another about every 5 years.  Hence, any particular company is just another line on my resume.  My compensation is not tied to any volume factor and bonuses are discretionary.  So, why do I work so hard?

I am definitely NOT doing it for the BOSS.  Those who read my posts know that I have deepest respect for entrepreneurial bravery and ingenuity of business owners (even when I address their negative traits as a source of frustration).  And I cannot really complain; most of my bosses have shown a lot of appreciation for my efforts.  But, unfortunately, they are capable to see only the superficial aspects – long hours, multi-tasking, etc.  The quality of the impact I make on their company completely escapes them.  Plus, unlike others, I don't run to report every single achievement.

So, no I am not doing it for the bosses or their recognition.  One can say that the reasons fueling my drive for excellence are selfish.  I do it for myself.  I simply cannot do it differently.  It doesn't matter whether anybody else acknowledges it, if what I do is not up to my own standards, I get extremely disconcerted. 

I have learned this about myself a long time ago – dissatisfaction with my own performance is the biggest source of frustration and anxiety.  So, the choice is simple: either apply your absolute best or suffer the psychological consequences.  That is why I work so hard.  It makes me feel at peace and, yes, proud.   

Few years ago I was flying with my boss to Amsterdam for meetings with our bankers.  I was outlining the important issues I wanted to address and touched on the impressive growth rates we have achieved.  I guess my excitement affected him and he felt compelled to tell me how much he appreciated my hard work.  This is what I  told him, "When I came, the company was doing $40M a year.  It did $80M a year after, $120M a year after that, $160M last year, and I guarantee $200M this year.  Knowing that I was instrumental to that growth is what drives me." 

You say, vanity?  And may be you are right.