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Beyond finance – boards seeking CFOs with strategic thinking, creativity and innovation after role expanded during the pandemic

Boards today want Chief Financial Officers (CFOs) to go beyond the traditional finance remit and play a key role in value creation and innovation, according to a new report.

BIE Executive, the professional services advisory, surveyed 225 CFOs at varying stages of their careers, as well as MDs, CEOs and other senior leaders, to get a holistic view of what businesses need from a CFO.

The report showed that the CFO was at the forefront of tackling challenges across the business during the pandemic, with short-term cash flow, commercial contracts, operational effectiveness and business survival the top priorities. CFOs helped lead businesses through new challenges such as furlough, supply chain issues and customer retention, and many also took on responsibility for legal (54%), IT (53%) and risk management (43%). 

Most CFOs welcomed the broader role, with the survey revealing that 91% felt it was a positive step. Some 56% believed the finance function is now viewed more favourably as a result, and 37% said the pandemic had positively impacted their careers.

Post-pandemic, boards are now looking differently at what they want from a CFO. The report showed that longer-term skills are now in greatest demand, such as strategic acumen (67%), and innovation and creative thinking (42%); with CFOs themselves only ranking these skills at 37% and 11% – believing that commercial and operational decision-making is still viewed more highly.

The report was co-authored by Amy Luke, Director of Finance Search at BIE Executive. She said: “Boards are demanding more and more from their CFOs. With the evolution of the role, they are seeking financial stewards and strategists with the ability to drive change and lead other people. In the past, CEOs were tasked with setting their organisation’s vision and the CFO would typically sense-check their ideas. Our survey showed that boards want CFOs to bring more to the table and help create and shape the vision.”

Risk management has now become a central pillar in a modern CFO’s responsibilities, with 43% of those surveyed saying it was part of their role. Meanwhile 88% of CFOs and board members said that understanding both operational and financial risk had been vital in the last two years. Most companies surveyed are now looking to blend these two areas of risk; impacting the profile of the people they hire.

Amy Luke said: “The survey found that an increased understanding of risk and better risk management was high in priority for board members. They are looking to hire people with a strong appreciation for risk management but also the leadership skills to improve the risk function, both by investing in technology and increased reporting, and through driving a culture that is more risk-aware. Often these individuals have a financial audit background, but they have the commercial and operational acumen to bring real value and service to the role.”

Meanwhile, the CFOs and boards surveyed all recognised the importance of equality, diversity and inclusion (ED&I), and environmental, social and governance (ESG) initiatives. However, most admit that these key topics took a back seat during the pandemic. But the report showed boards are now placing increased importance on both ED&I and ESG, and they expect the CFO to play an active role in driving improvements and the overall ESG agenda, rather than just reporting progress.

Eoin Canty, Research Director of Finance Search at BIE Executive, and report co-author, sees CFOs increasingly championing diversity in search processes.

“It is clear that there are many competing priorities for the CFO’s time, but most said their companies value ED&I initiatives as a means to improving diversity of thought among their finance leadership and wider boards of directors,” he said. “This is definitely now back on the agenda with the CFO central to both strategising and communicating these priorities to stakeholders.”

The newly expanded role of the CFO was less well-received by aspiring CFOs, with 92% of those responding believing that promotion is now harder and that they would need to move companies in order to secure a C-suite role.

The report authors attribute this succession disconnect to remote working during lockdowns, plus the challenge of side-stepping from finance to secure experience in other areas.

Eoin Canty said: “During times of crisis many businesses created a core group of senior decision makers to make choices at pace. As a result of this, up-and-coming talent may not have had as much exposure to that level of the business. It’s harder to develop talent remotely.”

Once in-role, few CFOs reported training up a successor as a priority, with many suggesting they would recruit the next role externally. “It appears that companies should be doing more to retain and develop their finance talent, because only 5% are being promoted to CFO internally, despite 50% of boards saying it’s important to have a successor in place,” said Eoin Canty.

“Senior leaders can support aspiring CFOs by understanding any skills they might be seeking to develop and offering short-term projects or lateral moves to assist with that growth.

“There is currently a whole community of finance professionals who feel they have not been given the opportunity to grow and are now seeking that development elsewhere,” he said. “Succession planning and talent development must once again be a focus for CFOs and boards.”


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