The Power of Constructive Tension: The Value of Positive Conflict in the CEO-CFO Partnership 

Imagine the person with whom you find it the easiest to collaborate. Have you ever had an argument? 

Healthy relationships go hand in hand with healthy conflict, and it’s the same when it comes to the CEO-CFO partnership. While alignment is important, constructive tension in the relationship is also a good thing.   

Constructive tension is the positive conflict that arises when individuals with different perspectives engage in open, honest discussion to find the best solution. CEOs and CFOs bring different viewpoints to the table, shaped by their distinct roles and responsibilities, and both good CEOs and good CFOs are willing to challenge each other to ensure their voices are heard.   

What Causes Tension Between CEOs and CFOs?

As an example of a few points where CEOs and CFOs might experience constructive tension, 45% of CEOs rank growth among their top three priorities but almost two thirds of CFOs put it in their top three. This tension can lead to more balanced growth initiatives as the CEO and CFO’s contrasting views can help them gain a clearer idea of what needs to be done to successfully drive expansion. 

Similarly, while both CEOs and CFOs agree that AI will radically affect their businesses in years to come, they may have different views on the pace and scale of AI investments, especially because these investments often require a large injection of capital that the CFO will have to oversee and manage. But, on the flipside, this tension ensures AI initiatives are pursued responsibly. 

Talent is another snag point where CEOs and CFOs often disagree. CEOs rank workforce issues as the second-most-pressing priority, while CFOs rank it fourth. Again, this difference of opinion arises because CFOs and CEOs often have different approaches to financial risk. However, just as was the case with all the previous instances I’ve pointed out, this tension can be positive as it can lead to a talent management approach that balances strategic needs with financial constraints. 

Some degree of tension between the CEO and CFO is normal and can be helpful. The trick is to ensure that this tension remains constructive and that it doesn’t devolve into bickering, resentment, mistrust, or worse yet, a toxic work environment for everyone caught in the middle of it.  

The Ideal Personality Traits for a Cohesive CEO-CFO Partnership

We believe that a wide range of different types of individuals can succeed in the C-suite. There is no one-size-fits-all executive formula.  

But when it comes to creating a CEO-CFO partnership that stays strong and aligned, there are important personality traits that can act as the glue between the chief executive officer and the chief financial officer. These include: 

• Openness, Transparency, and the Willingness and Ability to Communicate 
  Both the CEO and CFO should be willing and able to share information, ideas, and concerns freely with each other. They should create an environment where open communication is encouraged and valued, not just among themselves but among their direct reports and employees too. This is important because research found that employees who feel their leaders are authentic and transparent report higher levels of job satisfaction and organizational commitment.   
   
• Trust and Respect 
  A foundation of mutual trust and respect is just as important. The CEO and CFO should have confidence in each other’s abilities, integrity, and commitment to the organization’s success. When the CEO and CFO do not trust or respect each other, they effectively hobble the other and severely decrease their ability to be effective in their role.   
   
• Adaptability and Flexibility 
  The CEO and CFO must be adaptable and flexible. They should be open to new ideas, willing to adjust strategies when needed, and supportive of each other through change. Leaders who are more adaptable and flexible are more likely to be successful in their roles, and CEOs and CFOs with these traits are more likely to engage in constructive tension rather than destructive misalignment.   
   
• Emotional Intelligence and Empathy 
  High emotional intelligence allows the CEO and CFO to understand and manage their own emotions and those of others. This personality trait is important for dealing with complex interpersonal situations, maintaining constructive tension, and creating a positive work environment. A 2006 study found that emotional intelligence is positively related to transformational leadership and leader effectiveness.   
   
• Complementary Skills and Diversity 
  While shared values are important, the CEO and CFO should also bring complementary strengths to the table. This diversity in perspective and skill sets can lead to more balanced, well-rounded decision making. McKinsey & Company found that executive teams with greater diversity in terms of background, experience, and perspective make better decisions and drive improved financial performance.   
   
• Collaborative Mindset and a Passion for Shared Leadership 
  The CEO and CFO should view themselves as partners working towards a common goal. They should be willing to listen to each other, consider different viewpoints, and make decisions together. At the end of the day, the CEO needs to be willing to “share” their leadership with the CFO. This is needed because, as a 2013 study found, collaborative leadership leads to improved team performance, increased innovation, and better decision-making.   

How to Build a Strong CEO-CFO Relationship

The main message for businesses is clear: Invest in the CEO-CFO relationship because it is an asset no organization can afford to squander. 

To ensure a good fit between the CEO and CFO, organizations can make use of psychometric assessment tools like the Hogan Assessment that provides insights into an individual’s personality traits, strengths, and weaknesses. By administering the assessment to both the CEO and CFO, potential areas of conflict or disagreement can be identified. This can enable the executives in question to work together to overcome these differences and build a stronger working relationship. 

But the Hogan Assessment, or any assessment for that matter, should not be used as a standalone or be-all and end-all solution. Organizations can also invest in various strategies to support the development and alignment of the CEO-CFO partnership, like: 

• Executive search services to identify CFO candidates who have the right mix of technical expertise, strategic acumen, and interpersonal skills to complement the CEO’s leadership style. 
• Succession planning to proactively identify and groom potential successors for both roles. This can help you to maintain the continuity of the partnership over time. 
• Executive onboarding and ongoing leadership assessment and development to provide targeted training, coaching, and mentoring. This can help these leaders to develop the skills and shared understanding necessary to overcome challenges and drive long-term success. 

If your organization is looking to strengthen its CEO-CFO partnership, consider reaching out to one of our consultants. We can provide the insights and support you need. 

About the Authors

Cathy Logue, FCPA, FCA is a founding Managing Director at Stanton Chase Toronto and Global Leader of Stanton Chase’s CFO Practice Group. She has over 30 years of executive search and financial leadership experience, working with clients across North America. Prior to her career in executive search, Cathy obtained her Chartered Accountant designation with Ernst & Young, and was awarded the Fellow (FCPA, FCA) designation in 2017. In 2021, she was recognized by the WXN Top 100: Most Powerful Women in Canada for her efforts in advancing women in leadership. Cathy sits on the Board of the Association of Executive Search and Leadership Consultants (AESC) and is former Vice Chair, Finance on the Stanton Chase Board of Directors. 

Daniel Casteel is the Global Functional Leader for CEO Search and Succession and Managing Partner of Stanton Chase Nashville. He is a veteran global executive who leverages his extensive experience in building executive leadership teams across diverse industries and geographies for the benefit of his clients. Daniel founded Stanton Chase Nashville in 2005 and has since established a top-caliber team in Georgia, Alabama, and Tennessee that brings great depth of industry expertise and business acumen to deliver outstanding leadership solutions for clients.