CFO leadership styles in Maltese listed entities : a study

Abstract

Purpose: Chief Financial Officers play a significant role in companies. The CFO provides the fundamental strategic direction to the success of the company, but this cannot be achieved without the ability, dedication and engagement of the accounting personnel. The success of a team in a hierarchical organisation is dependent on how CFOs interact with their team members. Leadership is fundamental in this aspect, as it aligns personnel to achieve company goals. The study will seek to explore and evaluate the best practice leadership styles and skills that can be adopted in managing their department. Design: To achieve the research objectives, a mixed methodology approach was adopted. One-to-one semi-structured interviews with CFOs were conducted to obtain qualitative data. Questionnaires were distributed to the employees working in the accounting and finance department of Maltese listed entities. Findings: CFOs primarily adopt a people-oriented style and focus on empowering, motivating, and supporting the team members. This renders positive employee engagement and performance. Conversely, a strict and commanding approach may generate resentment and disengagement among personnel, thus impairing job satisfaction and performance. Moreover, employees prioritise effective communication, recognition of efforts, being supported and motivated as the main skills that CFOs should relay to the team. Conclusions: It is important for the CFO to demonstrate effective leadership in leading the accounting and finance teams. The styles and skills they adopt may influence the behaviour of accounting personnel and overall departmental performance. Therefore, CFOs need to be sensitive to and aware of the various perceptions that evolve within the accounting and finance department. Value: The findings of this study provide a basic idea of the leadership concept in Maltese listed companies and the reciprocal perception between the CFO and his/her team.