This paper suggests why and how the CFO’s role in an FB differs from the CFO’s role in an
NFB. For CFOs in FBs, the resources of previous work experience in other FBs and the tacit
knowledge of financial management techniques should be more important than formal
training, such as a university education. In the principal–agent relationship between the
controlling family and the CFO, control mechanisms are likely to be introduced, but owing
to the stewardship culture in FBs, the CFO should perceive less agency treatment in FBs,
such as intensive and frequent formal monitoring, than he or she might in NFBs. However,
the CFO should also expect lower total compensation than he or she might receive in NFBs
because of the lower level of total incentive compensation as a result of the lower
availability of stock-(option)-based incentive compensation in FBs. Regarding collaboration
with a family CEO, the CFO is likely to play the role of a financial advisor to the decisionmaking
CEO. Owing to the lower need for formalization in FBs and less focus on short-term
economic performance, the CFO’s level of responsibility is likely to be lower than that in
NFBs, and he or she is likely to occupy a rather more traditional CFO role that mainly
focuses on core finance functions. Therefore, metaphorically, the CFO in an FB will act
more as a bean counter than as a strategist.
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This paper suggests why and how the CFO’s role in an FB differs from the CFO’s role in anNFB. For CFOs in FBs, the resources of previous work experience in other FBs and the tacitknowledge of financial management techniques should be more important than formaltraining, such as a university education. In the principal–agent relationship between thecontrolling family and the CFO, control mechanisms are likely to be introduced, but owingto the stewardship culture in FBs, the CFO should perceive less agency treatment in FBs,such as intensive and frequent formal monitoring, than he or she might in NFBs. However,the CFO should also expect lower total compensation than he or she might receive in NFBsbecause of the lower level of total incentive compensation as a result of the loweravailability of stock-(option)-based incentive compensation in FBs. Regarding collaborationwith a family CEO, the CFO is likely to play the role of a financial advisor to the decisionmakingCEO. Owing to the lower need for formalization in FBs and less focus on short-termeconomic performance, the CFO’s level of responsibility is likely to be lower than that inNFBs, and he or she is likely to occupy a rather more traditional CFO role that mainlyfocuses on core finance functions. Therefore, metaphorically, the CFO in an FB will actmore as a bean counter than as a strategist.30
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