CEO Inaction Endangers Company: Final Part of Series Discussion
In a series discussion on Proformative, a CFO shares their confusion when facing CEO inaction and blocked shareholder communication, exploring whether the CFO should bypass the CEO to directly report financial crises to shareholders. This is the third part of the series; the author has taken action and will disclose the results later.
Source: Proformative This discussion is the third part of an ongoing conversation.
Part 1:https://www.proformative.com/questions/ceo-inaction-killing-company-now-what
Part 2:https://www.proformative.com/questions/ceo-inaction-killing-company-part-2
Continuing from the above:
"We are all experienced CFOs on this site. For me, before joining this company, I was aware of the challenges of working for it (perhaps not to the extent of the eventual deterioration, but I certainly understood it was a distressed company). I fully understood the work risks involved in disclosing information to shareholders (family members), as well as the potential consequences. My true purpose in posting was to see whether CFOs share a consensus on the concept of 'fiduciary duty'—that is, whether a CFO has an obligation to report serious financial conditions to shareholders other than the majority shareholder CEO remains an open question. If the CEO blocks communication with shareholders—which, in my experience, can only happen in family-owned businesses—can we as CFOs simply accept that status quo without further reporting? I have not yet seen a consensus among commenters on this site, and perhaps never will. By the way, I took action a few months ago and will disclose the results in my final post. My original intention was to engage in a thoughtful, open discussion on the concept of the CFO's 'fiduciary duty' in this specific case."