Meta’s C-Suite Shuffle Follows Growing Trend Toward More Strategic Role for CFOs

In conjunction with its Q2 earnings report, Meta — the company formerly known as Facebook — announced that as of  Nov. 1, current Chief Financial Officer David Wehner would take on a new role as “Meta’s first chief strategy officer, where he will oversee the company’s strategy and corporate development. Susan Li, Meta’s current vice president of finance, will be promoted and serve as Meta’s chief financial officer.”

The move by the social media giant emphasizes a trend that has seen CFOs taking on more strategic roles within corporations, well beyond the traditional scope of the position.

What Exactly Is Strategy?

The definition of the word strategic is of course somewhat amorphous. PYMNTS.com has extensively covered “The Strategic Role of the CFO,” which encompasses many different aspects of corporate strategy, some of which are more prosaic than others. Examples include digitization and improving customer relationships by automating accounts receivable and accounts payable (AR/AP).

Such seemingly tactical tools within the traditional CFO scope have transcendent strategic potential. For example, the pandemic elevated digitization and remote handling of financial matters a pressing strategic imperative. The resulting supply chain snarl has elevated this once routine scene to the top of every corporation’s strategic planning agenda. The potential to integrate financial and non-financial data within transformative Business-to-Business Payment FinTech (B2BPFT, to coin an acronym) has truly transcendent potential to make the entire logistics ecosystem exponentially more efficient and effective.

As economic data poses a conundrum for analysts — for example, why is the GDP stalling in the U.S. even as employment is rising? —  CFOs know the explanatory variable is “P”: productivity.

Supply chain bottlenecks extend from the first tier for large companies such as Caterpillar down to the second and third tier (suppliers’ suppliers and so forth). Strategically, CFOs need to assess whether B2BPFT can solve these issues and, if so, how? Presumably, digitizing paperwork and paying faster for prompt delivery can take at least some degree of slack out of a woefully slow supply chain.

Other issues that have risen to the strategic level include foreign exchange (FX), which may be viewed in concert with the once nascent and now descendant crypto alternative, as well as rising interest rates worldwide.

So far in Q2, FX changes have severely impacted the latest round of corporate earnings announcements. However, rising rates will tend to slow the pace of payments and create other distortions based on the dramatically increased time value of money last seen in the late 1970s and early 1980s, when the legendary Paul Volcker — the Federal Reserve chair — used every bit of leverage available from the one tool at his disposal, the Federal Funds Rate, to slay the inflation dragon that imperiled the nation after the Vietnam War.

One school of economic thought, which counts among its members Nobel Laureate Paul Krugman, subscribes to the notion that our current bout of inflation is more analogous to the post-World War II episode than the post-Viet Nam variety. If so, a CFO’s strategic role may be decisive. In that era, exploding demand from over 12 million returning U.S. service members collided with a supply-side crisis as the U.S. industry retooled from defense to consumer goods, creating situational inflation that persisted for years but was in the longer term transitory. In time, supply and demand reached equilibrium, and a decade of prosperity ensued in the 1950s which extended through the go-go ’60s.

In that case, the current zenith in the time-value of money as indicated by interest rates may normalize to the lower levels we have become accustomed to for the past 30 years, or at least to levels prevalent between 1984 and 2008, a period punctuated by radical Federal Reserve action in response to the Great Financial Crisis (GFC).

CFO as CSO, Meta Style

In the case of Meta, current CFO Wehner has a strong background in mergers and acquisitions, having worked at investment banker Allen & Co. prior to joining Meta in 2012. Thus, one can predict with a reasonably high confidence level that M&A will be a big part of his CSO day.

Meta, as not so subtly symbolized by its rebranding, is endeavoring to literally create a new digital universe, the metaverse, a lofty ambition which more comparable to interstellar travel than a mere moon or Mars shot. That alone will require many build-or-buy decisions. Implementation of the latter will be challenging on a bipartisan basis due to the acute antipathy of the public sector, driven by public opinion.

Another interesting strategic question is whether the metaverse has payment applications. Could avatars virtually negotiate terms and build the trust necessary to move transactions from “meatspace” (as techies sometimes sardonically refer to it in RL (real life)?  Could CFOs virtually troubleshoot dockside disputes? Only time will tell, but one imagines Mark Zuckerberg would say, “Yes, we can.”

It is typical for a seasoned, long-tenured CEO to build a formidable team of senior executives to manage the more traditional components of the finance department, freeing the CFO to handle the more strategic work in the classical M&A context. Meta’s reorganization has the potential to free Wehner to laser-focus on this aspect of the business while also freeing him from the management of direct reports who oversee the routine.

Will Wehner Be a Winner?

It will be interesting to see how Wehner carves out the new CSO role. Given the virtually simultaneous departure of long-time Chief Operating Officer Sheryl Sandberg, he may enjoy more than customary latitude to “lean in” to the role.