Can CEOs and CFOs Get on the Same Page?

Executives at an organization aren’t going to prioritize the same things at all times. The VP of meetings isn’t going to think much about internal technology expenditures when the annual conference is six weeks away, just as the head of membership won’t spend much time dwelling on site selection for a conference that’s five years away. Strategic focus across an organization is an admirable thing, but it means understanding that everybody will see it through a different lens.

So in some ways it’s not surprising that CEOs and CFOs can diverge when it comes to priorities. But there’s an eyebrow-raising disconnect between the two groups in the latest edition of Nonprofit Standards, a benchmarking survey conducted annually by BDO’s Institute for Nonprofit Excellence. Based on a survey of nonprofit leaders, mostly in the charity space, the report lays out a number of stark contrasts:

• While 60 percent of the CEOs surveyed say that “inability to meet demand for services is a high/moderate challenge,” only 44 percent of CFOs agree.
• 44 percent of CEOs say staff recruitment and retention is a high-level challenge, but only 27 percent of CFOs agree.
• Managing growth and increased regulations are big challenges, according to more than a quarter of CEOs, but less than 10 percent of CFOs feel the same.
• CEOs are game for technology investments, with 75 percent saying they’ll invest in it in the next year, but CFOs are more skittish, with only 58 percent of them saying they’ll do so.

To some extent, the findings simply reveal that CEOs are thinking about big-picture matters while the CFO is keeping an eye on the numbers. But Laurie De Armond, partner and national co-leader at BDO’s nonprofit and education practice, says the disconnect should be concerning.

“These findings reinforced some things that we sometimes see in practice at organizations, where CEOs make decisions without sufficient input from those on the finance side of the house,” she says. “We’ve seen situations where an organization CEO makes a decision that ultimately maybe wasn’t as well informed as it would have been if they had included the CFO in the process.”

Part of the problem is that—to extend the lens metaphor—CFOs may be inclined to look at things with a magnifying glass, while CEOs are working with a telescope. That can complicate conversations about technology investment, for instance. De Armond recalls a conversation with a nonprofit CFO after a presentation on process automation.

“She was so excited about the opportunity about what this could mean for efficiencies within the finance function, but her first thought was, ‘But we don’t have the money for that,’” she says. “I think it does speak to how CFOs are more mindful of how money gets spent in the near term, and with a focus on putting those dollars toward programming and not necessarily on infrastructure changes.”

Changing that situation may require CEOs to be a bit more realistic, while also asking CFOs to play a stronger role as an organization’s strategist, not just the person holding the purse strings. “We’d like to see that narrative change and have the two sides work more cohesively in partnership,” De Armond says.

That process ought to include volunteers too, says Adam Cole, partner and national co-leader at BDO’s nonprofit and education practice. “It’s not just about the finance people—it includes the board as well,”  he says. “You want to make sure you have people with financial acumen on the board and people that understand the programs. It’s got to be a very holistic approach.”

Here, too, the CFO has a valuable role to play. In a blog post on BDO’s website earlier this year, De Armond wrote that “CFOs should go beyond presenting facts and figures  (opens in a new tab), and tell their organization’s financial story using visuals to communicate insights.” That can be a challenge for CFOs, who in a 2018 survey said they were feeling burdened by the need to take on strategic roles. Recognizing that there’s a payoff at the end for that work—a better-focused and more successful organization—can ease that burden. That is, if a CEO is willing to recognize the disconnect and lead their finance staff through it.

How has your association addressed disconnects between between finance and leadership? Share your experiences in the comments.

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