I got chatting with an investment banker working with a Japanese securities firm on a flight back to Mumbai over the weekend. We got talking about, what else, the Tatas' bid for Corus and the insatiable Indian appetite for acquisitions. And how, he exclaimed.

He recalled how three years ago, in his previous job as an M&A advisor at a Big Four consulting firm, he had hawked several ailing European engineering firms to a handful of Indian companies. None of them took the bait.

And now, he said, the same Indian companies were buying the same European firms for three and four times the price! "I am reminded of Mumbai's heated property market," he added.

Last week, I found myself sitting around a table with a few chief financial officers. The occasion was a CFO survey presentation cum discussion hosted by consulting firm KPMG.

One CFO, working with a real estate giant, narrated how his firm had zeroed in on a large land deal recently. His natural instinct, as a man whose job is to control costs and guard finances, was to caution the company. And yet, he couldn't.

"Because if we lost the deal and prices went up further, instead of being a cost controller, I would be regarded as a cost adder," he said.

I talked around a little more. The consensus among the CFOs seemed to be this. India Inc was in an unprecedented grow-the-top line mode. There was scarce emphasis on cost control and the like. Of course, profits would have to be maximised. But that would be done by increasing profitability itself, through a host of other means, like sharper treasury management.

This led me to ask, in this high-voltage, grab-everything-that-comes-in-your-hand environment: Does anyone listen to the CFO? And more importantly, is the CFO putting his or her foot down when necessary? Or is he or she as hypnotised by the goings-on as
everyone else?

Alternatively, what were the chances the promoter/CEO would hold back on a major investment decision because the CFO protested? I could use the empirical evidence of the number of big deals to argue that the CFO may not be the most vocal person around. But that may not be fair since the "story" has just begun and only a handful of recent cross-border acquisitions (think pharmaceuticals) have imploded.

"So, have CFOs been reduced to spectators today?" I asked Pradip Kanakia, KPMG head of risk advisory services, the man who "anchored" the India end of the KPMG survey.

Most definitely not, Kanakia said. He argued that on the contrary, in most of the companies he knew, the CFO was playing a stronger role than ever. He quoted two examples of a large IT company and a pharmaceutical company--both south-based. In each case, he said, he could vouch for the fact that the promoters would not budge unless the CFO gave his nod.

The theoretical argument goes like this. CFOs are mostly trained chartered accountants. By nature their disposition ranges from the realistic to the pessimistic. So they ought not to get swayed in the manner the rest of the board might.

But what if the CFOs were not performing their traditional role, particularly in the current environment, I asked. Well, that was possible, but such deals might well fail at some point, he said. And the truth would always emerge. According to him, increasingly, CEOs too preferred joint accountability, though they might be finally responsible. And that made them bring in a financial consensus as well.

On the other hand, several companies and their promoters were hiring CFOs with grit. Or in very senior positions of authority. Gautam Doshi of RSM & Co joining Reliance ADA as group head of finance is quoted as an example. So is Arun Gandhi, who joined the Tata Group from N M Raiji & Co. While Gandhi is M&A head at the Tatas, he hails from an accounting background. The idea is that these folks would sound the alarm bells if the expenditure head in question looked capable of long-term damage.

In conclusion, it's too difficult to tell whether or not the CFOs are sleeping on the watch. The important thing is of course to ensure that they are alert and don't get swayed by the euphoria. As a shareholder or a company, this could be a check list of sorts.

Ensure joint accountability between CEOs, senior management and CFOs.

Invest in the finance function. This is important. The CFO should have business intelligence from the system and should have enough talent to support him or her so that the routine tasks--financial controls, treasury, tax, reporting, working capital management, tendering, procurement, investor relations and regulatory compliance--are managed by a skilled, senior team.

Ensure your company invests in or empowers the CFO effectively. And then, make him or her more openly and to some extent independently accountable.

Finance divisions and CFOs should also "feed" information and insights into the rest of the organisation. Like playing a pro-active role in forecasting.