Chief Financial Officers: joining the executive committee is not to be underestimated – interview with Anne-Laure Pams for Option Finance

Joining a company’s executive committee is a significant milestone for senior leaders. However, CFOs cannot rely solely on their expertise if they want their voice to be effectively heard.

Becoming a member of the executive committee is far from a trivial addition to a CFO’s business card. It reflects the importance of the function they represent, on a par with the group’s other key leadership roles. Yet joining this governing body is not a mere formality—especially when it is their first experience in such a role. And still, the implications of this new status are sometimes underestimated.

“This phenomenon is typical of expert roles,” notes Anne-Laure Pams, Managing Director of the Leadership Advisory practice at Grant Alexander. “When CFOs join a leadership body, their instinct is often to showcase their expertise above all else. But the executive committee is not just a collection of experts. Its members are expected to contribute to a collective reflection on the company’s strategy.”

Within the executive committee, CFOs must learn to make decisions that may seem counterintuitive—accepting riskier projects that may not be profitable in the short term, but could deliver value over the longer term.

CFOs often continue to behave solely as finance leaders in front of their executive peers. “Even if they represent a support function, they must understand that they are joining a new team and position themselves within a broader management role,” continues Anne-Laure Pams. “That said, they are still expected to provide financial insight on the matters discussed before decisions are made.”

However, this input should not be perceived as a veto by their peers. Finance professionals may naturally be inclined to favor the most prudent approach from their standpoint, sometimes becoming overly resistant to innovative projects and quickly being seen as “the one who says no.”

“Professionals from finance—as well as those from IT or R&D—are exposed to a wide range of risks, which they are tasked with mitigating,” emphasizes Anne-Laure Pams. “Within the executive committee, they must learn to make potentially counterintuitive choices, accepting projects that carry more risk and may not be immediately profitable, but will create value over time.”

Read the full article on the Option Finance website.