<h2>Executive Summary</h2><ul><li><p>CFO effectiveness increasingly depends on the ability to exercise <strong>influence within the organisation rather than on technical expertise alone</strong>.</p></li><li><p>Influence extends beyond decisions to <strong>shaping agendas, narratives </strong>and the business’s<strong> definitions of risk and value</strong>.</p></li><li><p>Sources of power for CFOs include <strong>capital control, data ownership and board access.</strong></p></li><li><p>The <strong>CEO-CFO relationship requires careful calibration</strong> between enabling growth and enforcing discipline.</p></li><li><p>As AI reduces the value of execution, influence is shifting towards judgement, governance and the ability to shape decision frameworks.</p></li></ul>.<h2>Power, Performance and Positioning</h2><p>Increasingly, CFO effectiveness is about much more than just financial expertise. Drawing on organisational behaviour, Anand Vijaysankaran, Assistant Professor, Indian School of Business, highlighted how power is exercised, perceived and sustained across the organisation. While the role carries significant formal authority, influence is often constrained by positioning. The ability to navigate organisational dynamics is just as important as technical capability. CFOs operate at the intersection of strategy, governance and capital, yet progression and tenure are often shaped by how effectively they manage relationships, visibility and perception. Executive derailment is rarely analytical. It is more often political, perceptual and relational, driven by an inability to read context, calibrate visibility or manage leadership dynamics.</p><h2>Reframing Power within the Organisation</h2><p>While CFOs exercise visible power through approvals, controls and capital allocation, a second dimension lies in shaping the agenda itself, determining which issues are discussed and which are deferred. The most enduring form of power lies in shaping beliefs and assumptions, influencing how the organisation defines risk, value and strategic direction. Influence is not limited to accepting or rejecting proposals, but extends to framing choices, structuring discussions and shaping the boundaries of debate. Those who operate only at the level of decision-making remain reactive. Those who shape agendas and narratives exert more durable influence. At senior levels, advantage derives less from technical expertise than from understanding how decisions are shaped, challenged and legitimised within the organisation.</p><h2>Sources of CFO Influence</h2><p>The CFO’s role is underpinned by multiple forms of capital that together shape influence. Control over financial resources creates economic power, while ownership of data and performance insight provides informational advantages. Direct access to boards and audit committees strengthens institutional positioning, and sustained engagement with investors and analysts builds reputational capital. Internal credibility and relationships further reinforce social capital. In many cases, influence is constrained by an overly narrow interpretation of the role as purely functional rather than strategic.</p><h2>Managing the CEO-CFO Dynamic</h2><p>The CEO-CFO relationship is arguably the central axis of power within any business, but also a consistent source of tension. CFOs are expected to enable growth while enforcing discipline, creating inherent trade-offs around risk, pace and strategic priorities. Differences in external visibility and stakeholder engagement can further complicate this dynamic, and maintaining effectiveness requires careful calibration. Being viewed as overly restrictive can limit one’s strategic relevance. Conversely, overextending oneself in high-visibility settings can disrupt the alignment at the top. In particular, misjudging moments of visibility, especially in investor or media interactions, can create discomfort and alter leadership dynamics. In periods of underperformance, CFOs are often the first point of accountability, reflecting their fiduciary responsibility and external visibility. This asymmetry reinforces the need to manage both influence and exposure carefully.</p><h2>Influence Through Behaviour</h2><p>While structural power provides a foundation, influence is ultimately exercised through behaviour. Social astuteness, or the ability to interpret context, relationships and informal signals, is critical in understanding where influence resides. Interpersonal effectiveness, including the ability to build trust and manage stakeholder expectations, shapes outcomes without breeding direct confrontation. Equally important is perceived intent. Influence depends not only on actions, but on whether those actions are seen to be aligned with the business’s priorities. Political skill lies not only in being sincere, but in being viewed as sincere in the context of organisational expectations.</p><p>CFOs must also navigate the tension between challenge and alignment, avoiding both excessive resistance and passive agreement. Sustained influence requires the ability to calibrate stance across situations, rather than adopting a fixed posture.</p><h2>Power in the Age of AI</h2><p>As AI gets embedded in decision-making, the nature of influence will evolve. Routine analytical tasks are being automated, reducing the relative value of technical execution. Power is shifting towards those who can interpret output, challenge underlying assumptions and define decision boundaries. For CFOs, this expands the role from <em>reporting performance</em> to <em>shaping decision frameworks</em>. Influence will depend on the ability to apply judgement, ensure governance and provide strategic interpretation in an increasingly data-driven environment.</p><h2>From Control to Strategic Positioning</h2><p>The role of the CFO is often framed as one of control. Increasingly, it is one of strategic positioning. The ability to shape how decisions are framed, debated and legitimised within the organisation is now central to long-term effectiveness. This requires moving beyond functional expertise towards a broader understanding of power, relationships and institutional dynamics.</p><p> CFOs who recognise this shift can reposition themselves from gatekeepers to strategic anchors within the organisation. The question is whether they can recognise, calibrate and sustain influence. A lack of influence can be as consequential as its misuse, affecting not just organisational outcomes but leadership effectiveness more broadly. As organisations become more complex and decision-making more distributed, influence will accrue to those who can shape not only outcomes, but the context in which those outcomes are determined.</p>
<h2>Executive Summary</h2><ul><li><p>CFO effectiveness increasingly depends on the ability to exercise <strong>influence within the organisation rather than on technical expertise alone</strong>.</p></li><li><p>Influence extends beyond decisions to <strong>shaping agendas, narratives </strong>and the business’s<strong> definitions of risk and value</strong>.</p></li><li><p>Sources of power for CFOs include <strong>capital control, data ownership and board access.</strong></p></li><li><p>The <strong>CEO-CFO relationship requires careful calibration</strong> between enabling growth and enforcing discipline.</p></li><li><p>As AI reduces the value of execution, influence is shifting towards judgement, governance and the ability to shape decision frameworks.</p></li></ul>.<h2>Power, Performance and Positioning</h2><p>Increasingly, CFO effectiveness is about much more than just financial expertise. Drawing on organisational behaviour, Anand Vijaysankaran, Assistant Professor, Indian School of Business, highlighted how power is exercised, perceived and sustained across the organisation. While the role carries significant formal authority, influence is often constrained by positioning. The ability to navigate organisational dynamics is just as important as technical capability. CFOs operate at the intersection of strategy, governance and capital, yet progression and tenure are often shaped by how effectively they manage relationships, visibility and perception. Executive derailment is rarely analytical. It is more often political, perceptual and relational, driven by an inability to read context, calibrate visibility or manage leadership dynamics.</p><h2>Reframing Power within the Organisation</h2><p>While CFOs exercise visible power through approvals, controls and capital allocation, a second dimension lies in shaping the agenda itself, determining which issues are discussed and which are deferred. The most enduring form of power lies in shaping beliefs and assumptions, influencing how the organisation defines risk, value and strategic direction. Influence is not limited to accepting or rejecting proposals, but extends to framing choices, structuring discussions and shaping the boundaries of debate. Those who operate only at the level of decision-making remain reactive. Those who shape agendas and narratives exert more durable influence. At senior levels, advantage derives less from technical expertise than from understanding how decisions are shaped, challenged and legitimised within the organisation.</p><h2>Sources of CFO Influence</h2><p>The CFO’s role is underpinned by multiple forms of capital that together shape influence. Control over financial resources creates economic power, while ownership of data and performance insight provides informational advantages. Direct access to boards and audit committees strengthens institutional positioning, and sustained engagement with investors and analysts builds reputational capital. Internal credibility and relationships further reinforce social capital. In many cases, influence is constrained by an overly narrow interpretation of the role as purely functional rather than strategic.</p><h2>Managing the CEO-CFO Dynamic</h2><p>The CEO-CFO relationship is arguably the central axis of power within any business, but also a consistent source of tension. CFOs are expected to enable growth while enforcing discipline, creating inherent trade-offs around risk, pace and strategic priorities. Differences in external visibility and stakeholder engagement can further complicate this dynamic, and maintaining effectiveness requires careful calibration. Being viewed as overly restrictive can limit one’s strategic relevance. Conversely, overextending oneself in high-visibility settings can disrupt the alignment at the top. In particular, misjudging moments of visibility, especially in investor or media interactions, can create discomfort and alter leadership dynamics. In periods of underperformance, CFOs are often the first point of accountability, reflecting their fiduciary responsibility and external visibility. This asymmetry reinforces the need to manage both influence and exposure carefully.</p><h2>Influence Through Behaviour</h2><p>While structural power provides a foundation, influence is ultimately exercised through behaviour. Social astuteness, or the ability to interpret context, relationships and informal signals, is critical in understanding where influence resides. Interpersonal effectiveness, including the ability to build trust and manage stakeholder expectations, shapes outcomes without breeding direct confrontation. Equally important is perceived intent. Influence depends not only on actions, but on whether those actions are seen to be aligned with the business’s priorities. Political skill lies not only in being sincere, but in being viewed as sincere in the context of organisational expectations.</p><p>CFOs must also navigate the tension between challenge and alignment, avoiding both excessive resistance and passive agreement. Sustained influence requires the ability to calibrate stance across situations, rather than adopting a fixed posture.</p><h2>Power in the Age of AI</h2><p>As AI gets embedded in decision-making, the nature of influence will evolve. Routine analytical tasks are being automated, reducing the relative value of technical execution. Power is shifting towards those who can interpret output, challenge underlying assumptions and define decision boundaries. For CFOs, this expands the role from <em>reporting performance</em> to <em>shaping decision frameworks</em>. Influence will depend on the ability to apply judgement, ensure governance and provide strategic interpretation in an increasingly data-driven environment.</p><h2>From Control to Strategic Positioning</h2><p>The role of the CFO is often framed as one of control. Increasingly, it is one of strategic positioning. The ability to shape how decisions are framed, debated and legitimised within the organisation is now central to long-term effectiveness. This requires moving beyond functional expertise towards a broader understanding of power, relationships and institutional dynamics.</p><p> CFOs who recognise this shift can reposition themselves from gatekeepers to strategic anchors within the organisation. The question is whether they can recognise, calibrate and sustain influence. A lack of influence can be as consequential as its misuse, affecting not just organisational outcomes but leadership effectiveness more broadly. As organisations become more complex and decision-making more distributed, influence will accrue to those who can shape not only outcomes, but the context in which those outcomes are determined.</p>
