The role of chief financial officer was once interpreted as fairly narrow. He was seen mainly as a controller: the guardian of the company coffers. Nowadays, that role has undergone an evolution. Instead of being the back-office person he was once was, he is now expected to partner with the CEO and steer the business in a specific direction. The chief financial officer now plays a vital leadership role within the company.
EY’s publication ‘The DNA of the CFO’ puts it this way: “While commentators have long been touting the increasingly strategic role of the chief financial officer, the global economic downturn has ramped up expectations of CFOs and the finance functions over which they preside. Historically, chief financial officers have themselves tended to drive the direction of their role. But with greater internal demand, they are now in the spotlight providing financial and strategic insights to boards and executive teams keen for clarity amid the economic uncertainty.”
When searching for the perfect CFO for your business, you’re no longer just looking for superior technical skills and financial shrewdness. You’re looking for someone who exhibits the leadership traits of one at the helm of your organisation. The report indicates 76% of CFOs interviewed believe that non-financial metrics are becoming increasingly important. So they’re acknowledging the need for a more well-rounded skill base, and gearing themselves up for it. Here are some of the skills that a great chief financial officer can offer today:
A new dimension to corporate strategy leadership
Research among chief financial officers globally points toward a clear trend, notes EY. “In addition to their traditional role as head of finance, CFOs are increasingly taking the lead in corporate strategy development and business stewardship. A quarter of chief financial officers spend more time (60%) on broader strategic issues than on financial management, and they expect this trend to continue. Sixty–two percent of chief financial officers said they expect to spend between 60 to 80% of their time on broader strategic issues in the future.
This means that your senior management team can look forward to a unique set of insights when it comes to planning. Your chief financial officer will be able to give a financial perspective on long-term planning, making plans more realistic and likely to succeed.
Communication to the external marketplace
That’s right, we’re talking about stakeholder relations. The chief financial officer carries with her the gravitas afforded to a subject-matter expert. When it comes to financial considerations, she has the last word. Because of this, she is perfectly placed to communicate with stakeholders about the financial status and needs of the business. She should have both the technical and verbal skills to represent the organisation’s strategic progress to external stakeholders.
“High performing organisations manage their stakeholders effectively through regular and transparent communication and reporting that identifies and explains contingencies for managing risk and communicates regulatory change before it impacts the organisation,” said the EY report. “The chief financial officer is in a strong position to support this need for clearer communication and to build stronger relationships with stakeholders.”
Change management skills
Techtarget.com defines change management as “defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities.” If ever there was a time that your business needed to profit from changing opportunities, it’s now. An insightful chief financial officer will guide your business as to how best to react to change, and how to optimise your resources as you do so.
If your business could benefit from the unique set of leadership skills offered by a chief financial officer, but you don’t need someone full time, consider bringing on a part-time finance executive. Give us a call to find out how The Finance Team’s network of associates offer part time and interim financial leadership solutions that can be tailored specifically to your company’s needs.