Can a Controller Become a CFO or a COO?

Can a Controller Become a CFO or a COO?

A controller is a business partner to other functions and divisions within an organization. In many organizations, the role of the finance professional is as a business partner to the organizations supported. Controllers are now faced with much broader challenges and opportunities in today’s business world and are asked to take on additional responsibilities outside of the traditional “chief accounting officer” role.

But are they ready to move into the role of a Chief Financial Officer (CFO) or Chief Operating Officer (COO)?

The role of the controller: The controller as CFO?

The role of a controller is an excellent stepping stone to becoming a CFO. In a public company, the CFO focuses on dealing with investors, shareholders, and the press. In some cases, a CFO may delegate these responsibilities to their controller. In these situations, the controller functions as a financial operating officer responsible for the day to day management of the finance and accounting functions of the organization.

As an additional reference point, Ernst and Young define the four priorities for the Financial Controller in their 2008 Research Report entitled, “The Changing Role of the Financial Controller.”

The Controller's Priorities:

  1. Developing talent
  2. Improving reporting
  3. Getting back to basics
  4. Improving efficiency

The controller’s span of influence: The controller as COO?

The controller’s position impacts nearly every department within the organization. This requires that the role of the controller have broad and deep interpersonal skills. It is important to build relationships with the management or senior team members of every function at large companies.

As an example, if there is a large investment in inventory on a company’s balance sheet, the controller should establish a relationship with the inventory controls manager and the materials manager for the organization.

In general, the controller should be familiar with enterprise resource planning (ERP) systems, internal auditing, and have a good overview of the processes and systems used in the information technology and human resources departments of his or her organization. The following table provides an overview of a controller’s span of influence.

The Controller’s Span of Influence:

  • Ensure that regulatory and compliance requirements are followed across all divisions
  • Attend and participate at interdepartmental meetings
  • Provide opinions on the effectiveness of other departments
  • Address internal control requirements for the entire organization
  • Employee corporate policies including:
    • Delegation of Authority Policy
    • Segregation of Duties Policy
  • Develop enhanced internal control programs to address a weakness
  • Develop organization-wide metrics and scorecards
  • Develop enhanced organization-wide reporting programs

The role of a controller in smaller companies

Controllers of smaller companies may have responsibilities similar to a CFO. His or her responsibilities may even include some HR responsibilities as included below. This is a combination of a CFO and COO role.

The Role of a Controller in Smaller Companies:

  • Acquiring insurance coverage
  • Conducting public offerings
  • Decision making for financial process automation solutions
  • Dealing with lenders and investors
  • Determining customer credit limits
  • Investing pension and surplus funds
  • Administering changes to the pension plan
  • Maintaining employee files and leading HR policies changes

A controller can take on the role of a CFO or COO depending on their exposure to the differing areas of responsibilities and on the company size. This next step is also dependent upon the abilities, background, skills, and aptitudes of the individual.

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