Family business management: contribution of the CFO

Abstract

PURPOSE: The interaction of the chief financial officer (CFO) with family and non-family managers is important for the financial management of a family business to maximise wealth creation within the business. This paper explores the role and the possible conflict with managers from the family. DESIGN/METHODOLOGY/APPROACH: A mixed method is used combining interviews of CFOs, CEOs and a telephone survey of CFOs in Australia. Three propositions are tested. FINDINGS: Surprisingly, the authors find no evidence that there is substantial role conflict as has been found in previous research. Relationships with the family CEO and other family and non-family managers are usually positive. Commitment to the business from the family and strong support from the CEO are identified as making the CFO’s job easier. Conflict with external accountants appears to be minimised as external accountants usually focus on the management of personal financial affairs and taxation issues while the CFO focuses on business financial management. RESEARCH LIMITATIONS/IMPLICATIONS: The sample is Australian and relatively small. Practical implications – The contribution of the CFO will be optimised by giving them the opportunity to move out of the “bean counter” role to a more strategic financial management position. ORIGINALITY/VALUE: There is limited empirical evidence relating to the role of the CFO in the family business.