The role of the Chief Financial Officer (CFO) has transformed over the past decade due to the rise of big data and the impact of social and digital media.
CFOs have taken on a larger role recently due to the decline of the COO. In many organisations, as the COO role has been removed, their duties have been divided between the CEO and the CFO.
Customarily, the primary responsibility of the Chief Financial Officer (CFO) has been managing financial risks of the organisation to drive growth for the business. The CFO is responsible for areas of financial stewardship such as financial planning and record-keeping, that ensures assets are preserved and risks are minimised.
It’s clear that CFOs nowadays have a much broader and complex skill set than what has been considered 'traditional' Financial experience at the executive level in the past. This covers areas as broad as cyber security, regulatory compliance, M&A transactions, IT, customer service, logistics and corporate branding.
The evolution of the CFO and the finance department will require a change in the mix of skills held by the staff under the CFO as well. Rather than being focused on gathering financial data and presenting reports, they will be more involved in data analysis and delivering strategic recommendations to the business. Their roles will evolve from being focused on processes to a focus on strategy, moving away from passive reporting and towards active communication.
The position of the CFO and the demands of this continuously evolving role will continue to adapt to the needs of businesses, as focus shifts towards more agile methodologies and the involvement of Finance in key business drivers and strategic planning. CFOs are unlikely to go back to being simply number-crunchers. Instead, their sphere of influence will continue to expand and, consequently, they will need to demonstrate a new set of skills and capabilities.
To remain relevant, today’s CFOs must understand the drivers of change as well as how to remain relevant! Therefore, CFOs need to work on strengthening the less analytical aspects of their approach to business. Instead of hiding behind numbers in the board room, they must focus on fostering a leadership which encourages innovation and empowerment.