The job of the CFO is becoming increasingly complex. From growing ESG commitments to digital transformation programmes, a CFO’s remit is continually expanding and shifting from a traditional accounting role that safeguards the financial health of the business, to a more strategic function that must juggle competing and sometimes even conflicting priorities to drive growth.
“In the past few years, we are seeing a lot of market pressure on profitable growth and efficiency, which usually means trying to accomplish more with less,” says Carol Lee, CFO at LogicMonitor, a software-as-a-service IT-monitoring business. “If you lean towards profitability too much, are you leaving future growth and innovation on the table? Or when you lean into innovation too much, how do you make sure there’s return on investment (ROI) down the road? That’s the balancing act.”
In addition to these competing priorities, the demands on a CFO’s time are also rising. To better manage the increased workload, CFOs must be more disciplined with their time-management and more selective about what tasks they take on and what they delegate to the rest of their finance team.
“It is a challenge, but it’s only a challenge if you try to do everything,” says Raj Dadra, CFO at VCCP, a communications agency. “It’s better to deliver three or four initiatives well than 12 badly. Growth should always be the overriding priority, so I always rank the initiatives by the value or growth they’re going to deliver, and then select the three or four that are going to deliver the most value and focus only on those.”
This expanded remit also means the personal and professional skills needed to be an effective modern CFO have also evolved.
“You need to be a jack of all trades these days to be a CFO,” says Nicola Johnson, CFO at Pulse Clean Energy. “It’s definitely not just providing a historical view, it’s much more about looking forward and understanding the markets.”
This means traditional accounting skills are no longer enough on their own to meet the growing demands and expectations of the role.
“You need to have a diverse background to be a CFO,” says Johnson. “CFOs who have come from an audit background, then straight into a financial-controller role and up the chain, will find it quite difficult to span across all the different areas that need their attention.”
Therefore, while technical expertise is still a prerequisite, today’s CFO must marry that accounting know-how with strategic nous to help their organisation achieve its broader commercial goals.
“The modern CFO has to be a financial steward, but they’ve also got to be a key player in shaping the company strategy and growth,” says Dadra. “The ideal strategic CFO combines really good technical and financial knowledge with leadership, strategic insight and knowledge of the business and what drives it.”
Aside from this increased strategic proficiency, the modern CFO also needs the emotional intelligence to manage relationships with a diverse range of stakeholders.
“You’ve got to be able to build relationships and build confidence,” Dadra says. “CFOs need a balance of skills that enables them to not only manage the day-to-day financial operations, but also meaningfully contribute to the success of the organisation. The role has really changed beyond recognition.”
The CFO’s relationship with the rest of the executive team is also evolving, with the finance chief expected to develop a more collaborative role with other functions.
“You have to influence [functions] beyond finance,” says Dadra. “You are often seen as the right hand to the CEO, but you need to extend that to the rest of the C-suite to make sure you can really have an impact on strategic activities that are cross functional.”
Key to this is honing effective communication skills that can expertly distil complex financial information and make it easy to understand for a non-finance audience.
“The role is really about storytelling,” says Dadra. “It’s about building business narratives that are accurate but also accessible. You can’t talk in financial language across the business because [people] won’t always know what you’re talking about.”
The CFO balancing act also means articulating these stories not just to colleagues but to external stakeholders too.
“A lot of the communication used to be only internal; now you’ve got a plethora of external stakeholders including investors, ratings agencies, banks and lenders – there’s a whole different area of outreach that you have to do,” says Dadra.
CFOs therefore must extend their relationship-management skills to those external stakeholders to build trust and confidence that the company is presenting accurate information and the narrative behind the numbers makes sense in the context of the market, Dadra adds.
Ultimately, the CFO must become a strategic hub; a role with a 360-degree view of the business that can help it to drive sustainable growth and achieve long-term organisational stability.
“It’s all about connecting the dots,” says Lee. “Growth is a team sport; no single function can do all of that. But the CFO, along with the CEO, needs to figure out the best way to make sure the team is rowing the boat in the same direction and at the same pace. That’s where the CFO comes in to make sure the organisation is aligned and can achieve its growth and profitability goals.”
By doing this, CFOs can ensure all stakeholders – from investors to the board and management – are focused on the same outcomes, helping to shape business strategy and becoming an invaluable partner in the organisation’s long-term success.
The job of the CFO is becoming increasingly complex. From growing ESG commitments to digital transformation programmes, a CFO’s remit is continually expanding and shifting from a traditional accounting role that safeguards the financial health of the business, to a more strategic function that must juggle competing and sometimes even conflicting priorities to drive growth.
“In the past few years, we are seeing a lot of market pressure on profitable growth and efficiency, which usually means trying to accomplish more with less,” says Carol Lee, CFO at LogicMonitor, a software-as-a-service IT-monitoring business. “If you lean towards profitability too much, are you leaving future growth and innovation on the table? Or when you lean into innovation too much, how do you make sure there’s return on investment (ROI) down the road? That’s the balancing act.”
In addition to these competing priorities, the demands on a CFO’s time are also rising. To better manage the increased workload, CFOs must be more disciplined with their time-management and more selective about what tasks they take on and what they delegate to the rest of their finance team.
