Nobody knows your company much better than you need to do. In the end, you’re the Chief executive officer. Guess what happens the engineers what happens the development managers do and no-one understands the sales process much better than you. You realize who’s transporting how much they weigh and who is not. That’s, unless of course we are speaking concerning the finance and accounting managers.
Most CEO’s, particularly in small , mid-size enterprises, originate from operational or sales backgrounds. They’ve frequently acquired some understanding of finance and accounting through their careers, only towards the extent necessary. But because the Chief executive officer, they have to make judgments concerning the performance and competence from the accountants along with the operations and purchasers managers.
So, so how exactly does the diligent Chief executive officer assess the finance and accounting functions in the company? Very frequently, the Chief executive officer assigns a qualitative value in line with the quantitative message. Quite simply, when the Controller offers a positive, upbeat financial report, the Chief executive officer may have positive feelings toward the Controller. And when the Controller offers a bleak message, the Chief executive officer have a negative response to the individual. Regrettably, “shooting the messenger” is not uncommon.
The risks natural within this approach ought to be apparent. The Controller (or CFO, accountant, whomever) may understand that to be able to safeguard their career, they have to result in the figures look much better than they are really, or they have to draw attention away negative matters and concentrate on positive matters. This enhances the probability that important issues will not obtain the attention they deserve. Additionally, it enhances the probability so good individuals will be lost for that wrong reasons.
The CEO’s of huge public companies get this amazing advantage with regards to evaluating the performance from the finance department. They’ve the audit committee from the board of company directors, the auditors, the SEC, Wall Street analyst and public shareholders providing them with feedback. In smaller sized companies, however, CEO’s have to develop their very own methods and procedures for evaluating the performance of the financial managers.