Where HR Sits Tells You Everything

A former colleague left her CHRO role recently. Not because of performance. Not because the relationship with her team had broken down. She left because HR had been removed from the executive committee and was now reporting to the CFO.

She made her decision on principle. If the organisation did not value HR as a strategic function, she was not the right person for the role.

I understood exactly what she meant.

My career started at GE. HR at GE was not a support function. It sat at the top table as an equal. The CEO, the CFO, and the CHRO operated as a trifecta. People decisions were business decisions. Succession planning, talent development, transformation work, none of it happened without HR in the room where it counted. That was not accidental. It was a deliberate choice about where strategic capability lived.

In my work with P&G, I observed the same. The calibre of HR leadership was exceptional.

Not every organisation sees it that way.

When HR reports to the CFO, it sends a signal. The function is being managed as a cost, not developed as a capability. Transformation programmes get designed without the people dimension in the room. Integration work gets treated as a process problem rather than a human one. Decisions that will ultimately succeed or fail based on whether the organisation can execute them are made without the function that understands whether execution is actually possible.

The CHRO who is two levels from the CEO is not going to change that from where they are sitting. The structural positioning is the message.

Jack Welch, who famously started out calling HR the "health and happiness crowd," came to a different view. He described the CHRO as at least as important as the CFO, if not more so. His reasoning was simple. If you want to build a winning team, you do not spend your time with the person counting the money. You spend it with the person who understands your talent.

The best CHROs I have worked with were architects of business outcomes, not just people outcomes. That only happens when the structure gives them the seat, the access, and the mandate to operate that way.

Where HR sits is not an HR issue. It is a business one.