Now that the executive branch of the US government is grappling with “The Executive Health Conundrum” (Biden wasn’t aware for days that Defense Secretary Austin was hospitalized), I ask the question whether in the corporate landscape, particularly in the upper echelons of C-Suites, the executive health issues create certain reporting and delegation of responsibilities issues. As the steward of financial affairs, the Chief Financial Officer (CFO) is carrying a mandate that extends beyond the conventional realm of balance sheets and profit margins. The CFO has duties to the shareholders, BOD, CEO and other executive team members. The issue of information sharing on the CFO health involves a lot of shades of gray.
Post by Aleksey Krylov. Photo by Owen Beard on Unsplash
The CFO's Role in Transparent Governance
In a fascinating metamorphosis, CFOs have evolved from mere bean counters to becoming corporate custodians. No longer confined to the financial labyrinth, they find themselves delicately juggling numbers and many other stakeholders they serve. This modern corporate landscape requires delicate balancing, where fiscal responsibility intertwines with the broader concern for the health and vitality of the leadership team.
Decoding Executive Health Protocol
The executive health protocol may be complex, revealing layers beyond routine annual check-ups. Unpacking these layers unveils a nuanced approach that goes beyond the physical, considering mental and emotional well-being. One has to be mindful of confidentiality, safeguarding sensitive health data.
Navigating the Legal and Ethical Landscape
The CFO, akin to a tightrope walker, also navigates the legal and ethical landscape surrounding executive health. Compliance with corporate regulation becomes paramount, with the CFO acting as the guardian of not just financial integrity but also ethical considerations.
A Delicate Conversations with CEOs and Board of Directors
Initiating health discussions with CEOs requires finesse, breaking the ice delicately to broach a subject often considered private. Balancing transparency and privacy, the CFO also must balance the health-related privacy and the Board's right/responsibility to know. Beyond the boardroom, this process extends to building trustful relationships that transcend the professional realm. The conversation should involve the discussion of delegation of the responsibilities to the finance team members temporarily to ensure that the continuity of the finance function is preserved. In some cases, in critical health situations, the CFO succession discussion should be commenced.
Implementing the Executive Health Protocol
The blueprint for an executive health protocol should be put together with the input of a strategic HR professional. The HR professional can help draft the policy for the executives (similar to travel and entertainment policy, or purchasing policy, or IT policies such as A CFO’s Roadmap to Tech Agility in Life Sciences) that would outline the reporting obligations. The policy would also create the alignment for the CFO (and other executives) to do the right thing in the best interests of shareholders.
Closing Thoughts
The CFO role in the corporate governance is a critical one. Some argue the CFO is the second or third most senior person within a corporate structure. As such, CFO must be mindful of the duties s/he has to the shareholders, BOD and other executives. To protect the officer and ensure smooth operation in critical situations that involves executive health, companies should develop, adopt and periodically review the contingencies and policies that would give executive clear blueprint on how to act in such situations.
Clearly, Secretary Austin’s being in a hospital for several days without communicating up or down the command chain is less than optimal. If a corporation has policies regarding what to do in such situations, perhaps, this suboptimal could have been avoided altogether.