Sore Point: To Whom Should The CIO Report?

I hate to bring up a sore point ... OK, maybe I don't. But I do hate to belabor the obvious. Unfortunately, what I've been mulling lately qualifies as an obvious sore point: To whom should the CIO report? The reason I bring it up is because of a conversation I had recently with the CIO of a midsize manufacturing company. When I asked him whom he reports to, a bemused smile crept across his face. "I report to the CFO," he said, "and damn glad of it." He explained that the company at which he works is family-owned, and when the founder retired his son replaced him as CEO. The son, according to this gentleman, "doesn't have a clue." On the other hand, the CFO is a tech-savvy executive who understands the importance of IT to the company's future growth. All things considered, this CIO thanks his lucky stars that he reports to the CFO. That's not typical--and that's an understatement. In response to a blog posted by my colleague Chris Murphy about the reporting structures of the top technology execs at the companies on this year's InformationWeek 500 list of the most innovative users of IT (46% of the CIO’s report to the CEO or president; 24% to the CFO), one wag wrote this: "Reporting to the CFO is a nightmare, that's all I have to say about that." As with so many things CIO-related these days, the reporting structure seems to be something of a moving target. A recent feature story I did on "The Evolution Of The CIO" described the controversy that erupted at the recent Society for Information Management conference when the organization's annual survey pointed to a considerable drop in the number of top IT execs reporting to the CEO and an increase in the number reporting to the CFO. At the same time, Kevin Rosenberg, managing partner with executive search firm BridgeGate, says he's seeing "fewer CIO’s reporting to CFOs than ever before." The CEO and CFO aren't the only possibilities, of course. In the SIM survey, there was an increase in the percentage of top technology execs reporting to the chief operating officer, from 16% last year to 22% this year. That's significant, because some observers see the COO position as the next logical step up the corporate ladder for CIO’s. Also, CIO’s reporting to business-unit executives dropped, according to SIM, from 9% last year to 7% this year, while those reporting to the category "other" increased, from 5% to 10%. How much does it matter to whom the CIO reports? Mike Cuddy, CIO of Toromont Industries, a distributor of construction equipment along with other lines of business, reports to his CEO. But what are really important, he says, are the relationships the CIO establishes with key people in the organization. And while some companies discourage open dialogue among various levels of management, in most companies "who reports to whom doesn't preclude relationships," Cuddy says. The CIO can report to someone other than the CEO and be effective, he says, "but the CIO needs to understand who the CEO listens to and make relationships with them."