Wharton Dean Erika James on the future of leadership

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It’s not just the role of the CFO that’s been evolving over the past few years. Leadership, in general, has been changing. 

That’s an observation of Erika H. James, dean of the Wharton School of the University of Pennsylvania, who’s at the helm of educating the next generation of business leaders. A fundamental part of leadership: “You have to inspire people, you have to have a message and a vision that is compelling for people to follow your direction or to follow your lead,” James told Fortune CEO Alan Murray in this week’s Leadership Next podcast. 

However, “more recently, what we’re seeing that’s different is there’s so many more stakeholders that one needs to be responsive to, and that there’s so much more information immediately accessible that one has to attend to,” she said. With that comes leadership challenges in deciphering the information “in a way to make reasonable decisions,” she added. So, more accessible data is great, but harnessing it effectively is a necessity. 

“And we have to be mindful that any one decision might work well for one group of stakeholders, but not well for another group of stakeholders,” James said. “We have to know how to mitigate some of the issues connected with those changes.”

Erika H. James, dean of the Wharton School of the University of Pennsylvania / Courtesy of The Wharton School

As strategy becomes central to the CFO role, companies are gravitating toward candidates who have an MBA. Crist|Kolder Associates’s recent survey of CFOs at Fortune 500 and S&P 500 companies found that, so far, in 2022, 51.5% of finance chiefs had an MBA, compared to about a third who were CPAs.

In 2020, James became the very first woman and the first person of color to take on the position of dean of the Wharton School, founded in 1881. In her role, James wants to “remind people that societies thrive when commerce is flowing well,” she said. “And there’s considerable value add to this country and to the world by the business community,” James said. “It creates new services and products and allows people to generate wealth that changes people’s trajectory. I think we can’t forget that. And, I think in more recent years, we’ve had more and more reason to remember the important role that business plays.”

Businesses shouldn’t ignore the multiplication of stakeholders, according to James. “We certainly work for the shareholders and we work for different stakeholders who also either support what we’re trying to do, purchase what we’re doing, supply things that we need, buy things that we need,” she said. “I think it’s irresponsible not to pay attention to a broader swath of stakeholders, while also remembering that shareholders are a very important group of stakeholders.”

James is the co-author of the new book, The Prepared Leader. “A prepared leader is someone who knows how to identify vulnerabilities in the organization,” James explained. “[And it’s] someone who is looking at ways to mitigate those vulnerabilities.” Being prepared also requires building “high-quality trusting relationships,” she said.

James literally understands the psychology behind business relationships. “This was a relatively unplanned career,” she said. “I am an organizational psychologist and had no intention of being in higher education or business education. But what I learned is that I really liked applying, and understanding human behavior and human dynamics in an organizational context.”

She continued, “I had my first administrative real role at the University of Virginia where I led our non-degree executive education program. And that led to a deanship at Emory University, which then led to the deanship at Wharton.”

As the road leading James to Wharton shows, there’s no one path to leadership, and being flexible and open to exploring new ideas and concepts is part of the journey.

You can listen to the full episode of Leadership Next here.

Have a good weekend.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

The challenge of aligning finance and tax executives persists across industries, according to a European market insights survey by Ryan, a global tax services and software provider. Nearly 80% of tax executives surveyed believe that transactional tax data holds key strategic importance for an organization. However, just 14% of finance executives agree. Regarding the process of tax transformation, 48% of tax executives said there’s an unclear vision and agenda, compared to 19.5% of finance executives. And more tax executives (47%) believe that leadership isn’t pushing to transformation than finance executives (21%). More than a third of the executives surveyed work at companies earning €1 billion to € 5 billion (approximately $974 million to $4.8 billion) in revenue.

Courtesy of Ryan

Going deeper

Here are a few weekend reads:

“Microsoft’s remote-work-friendly CEO puts his finger on the big problem with working from home” by Jane Thier

“Wall Street’s ‘Dr. Doom’ says central banks are screwed and we can’t avoid a financial crisis. ‘Damned if you do, damned if you don’t’” by Will Daniel

“MicroStrategy’s Bitcoin king just saw his stash fall to a grim new milestone” by Shawn Tully

“Sharing a meal with others can reduce stress, improve well-being at work, and help you eat healthier” by Alexa Mikhail

Leaderboard

Here’s a list of some notable moves this week:

Anne Bramman, CFO at Nordstrom, is stepping down from her role. Bramman will remain with Nordstrom through the reporting of the company’s third-quarter 2022 financial results. Her last day will be Dec. 2. Michael Maher, Nordstrom’s SVP and chief accounting officer, was appointed interim CFO upon Bramman’s departure. Nordstrom has begun an internal and external search for a permanent CFO.

Dirk Elvermann was named CFO at BASF. Elvermann will succeed current CFO Hans-Ulrich Engel, who will retire following the 2023 annual shareholders’ meeting, Reuters reported. Elvermann joined the company in 2019 as president of corporate finance. The board has also extended the term of CEO Martin Brudermueller until the end of 2024.

Robert Leibrock was named SVP and CFO at Red Hat, Inc., a provider of open source solutions. Carolyn Nash, who was appointed to the SVP and CFO role in April 2022, has been named the company’s SVP and COO, effective immediately. Nash will continue reporting to Red Hat’s president and CEO Matt Hicks. Leibrock will report directly to Nash. Leibrock has spent much of his career at IBM, most recently serving as assistant controller. 

Nancy Buese was named CFO at Baker Hughes (Nasdaq: BKR), effective Nov. 2. Brian Worrell, current CFO of Baker Hughes, will move to a strategic advisor role and will depart the company in the second quarter of 2023. Buese previously served as EVP and CFO of global mining company Newmont Corporation from 2016 until earlier this year. 

Sandra Bell will retire as CFO of Tiptree Inc. (Nasdaq: TIPT), which allocates capital to select small and middle market companies, effective March 31, 2023 (or following the filing of Tiptree’s 2022 Form 10-K). Bell joined the company in 2015. Scott McKinney will succeed Bell as CFO. McKinney was promoted to deputy CFO in April and previously served as director of financial planning and analysis. 

Jonathan Batarseh was named CFO and treasurer at Charah Solutions, Inc. (NYSE: CHRA), a provider of environmental services and byproduct recycling, effective Oct. 17. Batarseh joins Charah Solutions from Brown & Root Industrial Services, where he was CFO. Before that, Batarseh served as VP of Tax at KBR and in senior financial leadership roles at companies including The Shaw Group and Atkins.  

Overheard

“A lot of real estate is going to be stranded because of global climate change…People have stupidly moved from New York to Miami, and from San Francisco to Austin, but Florida is going to be flooded and Texas is going to be too hot to survive there.”

—Nouriel Roubini, a New York University economics professor and CEO of Roubini Macro Associates, recommends real estate as one hedge against inflation, but on Bloomberg’s Odd Lots podcast, he told the hosts a caveat with regards to climate change, Fortune reported.