Dive Brief:
- Red Points Solutions SL, a brand protection and intellectual property infringement detection start-up, has hired former Workday finance executive Lena Shishkina as dual CFO-COO, a newly created hybrid position, The Wall Street Journal reported.
- Shishkina will focus on managing the company’s international data operations while adding U.S. staff to the Barcelona-based software provider. (Their U.S. and Spain branches are “siloed,” a representative told CFO Dive.)
- Shishkina's hiring comes as the combined CFO-COO position continues to gain traction in the C-suite as a way to leverage CFOs' insight into all aspects of operations. Red Points has nearly 250 employees.
Dive Insight:
Across industries, CFOs have been widening the scope of their responsibilities and are increasingly being called on to oversee human resources, strategy and planning, data analysis, technology, marketing and legal.
Before serving as Workday’s VP of finance, Shishkina served as finance chief of SAP SE’s U.K. and Ireland business, according to the Journal.
She “dabbled in operations work” during her tenure in these positions, she told the Journal. “While I didn’t have direct operational responsibility, I had a fair amount of accountability for operational [performance] and performance of sales and product management.”
A recent study by the American Accounting Association, titled, “Are CFOs Effective Operators? An Empirical Analysis of CFO/COO Duality” looked at the impact of the title-merging trend on corporate performance and found combining the roles does not impede operations in either department. It also found the merged role had no negative impact on future cash flows or return on assets.
“Managers from a financial background can fulfill operational roles admirably,” the study said.
The study considered whether the two domains are too dissimilar to be effectively managed by one person. It also examined whether CFOs who took on operational roles might become overburdened, resulting in deterioration in financial reporting quality.
The study found that having an executive taking on the combined role actually improved financial reporting. Among other findings, discretionary accruals of companies with a CFO-COO were more accurate in predicting future cash flows than in the traditional model firm, the researchers found.
To assess potential impact on operations, the study measured discretionary expenditures against cash flow and return on assets over a two-year period. Here also, it found no evidence that consolidating the roles had a detrimental impact on future cash flows or return on assets.
