Chief Financial Officer (CFO) – the Evolution of the Role
The role of the CFO has, like all other C-suite roles, undergone a transformation in recent years, writes Michelle O’Connor of Alternatives Elect. Whilst it will continue to be primarily responsible for financial planning and financial reporting for the organisation, it has broadened and expanded to require in-depth understanding and insight for two significant areas including managing the financial risks and the analysis of data. Alongside their traditional mandate to provide financial insight and analysis, CFOs are increasingly expected to contribute to strategic decision-making for their companies in areas as diverse as IT, procurement, future market direction and succession planning.
One area where IT and finance has converged is that of Big Data. CFOs now must collaborate closely with their CIOs in order to make the most of the wealth of information available, enabling presentations at Board level from both a financial and a broader business point of view. Communications skills are thus an imperative, as CFOs are expected to convey complex financial results and business performance to external stakeholders while interpreting financial data for different audiences internally.
The emergence of Big Data in decision-making is not just confined to financial decisions. As the budget versus actual spend is more transparent than ever, and calls for significant skill and knowledge in forecasting becomes increasingly required, the CFO must be be agile in his or her response to fast-changing, international market conditions.
An era of upheaval
The increase in regulation post-2008 now requires of the CFO a whole new understanding of risk, which demands more diverse skills than traditionally required. Compliance and control have become more complicated in the global environment and remain a vitally important responsibility. Equally, the ability to learn from other senior business colleagues in areas such as IT and human resources which lie beyond the academic and professional training of most finance executives is increasingly being seen as essential to a successful CFO role.
Keeping up with Industry Trends
The traditional training routes of ACA, ACCA and CIMA are still the main routes into this area. However, for those CFOs who have been out of formal education for some time, the need to keep up with the ongoing changing landscape is more vital than ever. Ongoing technical training, regulation, and data analytics are just some of the areas that CFOs need to get to grips with in order to keep up with the rapid pace of change demanded by their ever-widening roles. The top international accountancy and tax firms invest heavily in research on market trends and data and are a great resource for CFO’s. The digital revolution has meant that skills gaps need to be addressed at all levels. Middle and senior management need to ensure continuous up-skilling of their staff in order to make the most of this new era, which has been likened to “a revolution not seen since the advent of electricity”.
Developing a strong team, cultivating the skills of the next generation of financial leaders, and giving direct reports a variety of experience should be an ongoing process, all spear-headed by the CFO. Diversity of experience and exposure to other areas of the business, ideally in an international context, is a pre-requisite for an all-rounded CFO.
If you want to talk in confidence about a possible move at CFO or any other senior level position, please contact Michelle O’Connor at email@example.com
As a partner in Alternatives Elect Michelle focuses on international search assignments for ambitious and expanding companies across ICT, Agribusiness, Financial Services and FMCG. Prior to joining Alternatives in 2013, Michelle spent over seven years with the Executive Search practice in PwC Dublin, servicing a broad range of clients in a diverse range of sectors (retail, FMCG, professional services, manufacturing and start-ups) across the full breadth of executive level functions – HR, Finance, Operations, Commercial and IT.