Who's Your Boss?Who's Your Boss?

It's not uncommon for a CIO to answer directly to the CEO, but in a number of companies, the CIO reports to the CFO. There's logic behind that: Both jobs cover the same territory and have a financial impact on the company's bottom line. Purchasing IT wares and support make a hefty dent in the corporate treasury, and IT helps to generate corporate earning. And except for the CEO, the CFO and the CIO are the only two executives whose domains stretch to every corner of a company--operations as well as support.

As the third most powerful officer in most companies--after the CEO and chief operating officer--the CFO's job as the keeper of the coffers has evolved. The CFO's role goes beyond recording how money is spent to determining how money is spent.

Yet, no consensus exists among CFOs about whether the CIO should be supervised by the CFO or the CEO.

In information-intensive companies, such as financial institutions, in which IT virtually serves as the manufacturing plant for products and services, many agree the CIO should report directly to the CEO. "Particularly in our technology-heavy organization, the CTO [chief technical officer] needs to partner with the CEO because the job is so important in driving investment and growth," says Phil Mazzilli, CFO at Equifax Inc., the Atlanta credit reporting company.

Renee Hornbaker, CFO at Flowserve Inc., an Irving, Texas, pump maker, agrees. In an ideal situation, she says, the CIO should report to the CEO. At least, she says, that's true if IT has strategic importance, because the information officer needs to be part of a broader business strategy. "But if the CEO doesn't have the time, interest, or appreciation of technology, and the company has a tech-savvy CFO, then the CIO should report to the finance officer," she adds.

However, Al Wright, CFO of CMS Energy Inc., a Dearborn, Mich., utility company, says it's natural for the CIO to report to the CFO. That's because the CFO uses information gathered from IT systems to help formulate strategy for the company's future growth. "For centuries, financial officers have been responsible for information," he says. "As a result, there's a natural marriage, a synergy between finance and information."

Even in companies where the CIO and CFO both report to the CEO, the CFO is more equal, so to speak. "The CFO is closer to the pocketbook and because of that will be more equal than the CIO," says Constantine Konstans, a professor of management at the University of Texas at Dallas.

Take Flowserve, for instance. Hornbaker sees CIO Rory MacDowell as a peer on Flowserve's organizational chart, which shows both executives directly reporting to CEO Scott Greer. "He's clearly an equal," Hornbaker says of MacDowell. But as CFO, Hornbaker sits on Flowserve's President's Council, along with the CEO and divisional presidents. MacDowell attends the council meetings only when IT matters are discussed. "A lot of other things we discuss would not be of value to the CIO's time," Hornbaker says.

Many corporations have established advisory committees that include their top officers, such as the CFO, CIO, marketing and human resources chiefs, and the head of major business units. The committees meet regularly with the CEO. But these panels shouldn't be confused with the more muscular policy-establishing bodies, such as Flowserve's President's Council, or what's commonly referred to as the Office of Chief Executive at many other companies. As a rule, CFOs serve on both boards; CIOs don't.

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