Professional Development: Arming the CFO

by Angie Mak, 18 December 2009

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Professional Development

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aspiring finance chief CFO MBA mentor peers training

CFOs today are expected to be superheroes. In addition to being Guardian of the Books, today’s successful incumbent has to be the business’ Chief Policeman, thanks to increasing regulations; a Manipulator of Space-Time, because 24 hours in a day is never enough; possess extra-sensory perception for early-trouble detection; and fearless Navigator, helping the business slice through the unchartered waters of new business deals, IPOs and M&As.

And as climate change becomes a business imperative, the CFO will be required to be green as well. “Even if there is an expert in the environmental impact of bio-fuels, the CFO will have to engage that knowledge and think about it and analyse it for their own organisation,” says Alex Malley, CEO of CPA Australia. He sees the CFO leading a new cadre of finance experts specialising in environmental issues, from measurement of carbon footprints to valuation of assets taking into account climate-change effects to the purchase and sale of carbon offsets and credits.

The challenge is that this green superhero must continually update his or her repertoire while making sure financial reporting meets regulatory standards. It’s a high-stakes juggling act that calls for quickly shifting skill sets that meet not only the demands of the CEO, the board of directors and shareholders, but also the CFO’s own finance team, the IT team, human resources, legal and compliance, not to say government and stock market regulators.

What dynamic qualities are needed by CFOs and aspiring finance chiefs to meet this new era’s expectations, regardless of their industry or company? And what steps can they take to acquire and enhance the skills and qualities required by their evolving job description?

CFO Evolution

“What organisations need now is the firm leadership and financial discipline for the immediate short term, and the confidence of knowing they possess a business model which is sustainable,” says Dr Steve Priddy, Director of Technical Policy and Research at ACCA, the global body for professional accountants. “As global economic conditions continue to be uncertain, CFOs have every opportunity to emerge as leaders and to rise to the challenges ahead.”

A 2009 survey of CFOs and other finance executives around the world conducted by the ACCA and the Economist Intelligence Unit notes that the CFO’s role in Western nations now typically includes making strategic decisions and investments essential to revenue growth. However, the study says the trend is still only emerging in Asia, where finance is still seen primarily as bean-counting: a department that reports past financial results, processes transactions, and ensures compliance with financial regulations.

But the global economic crisis is providing Asia’s CFOs with opportunities to show how they can extend themselves beyond traditional finance responsibilities, the study concludes. In China, 82% of the respondents say they are now more involved in medium- and long-term strategy, with 79% of respondents in Hong Kong saying the same. When asked to agree or disagree with the statement that the finance function now works more closely with business units in strategic planning, 85% in China agree, versus 76% in Hong Kong.

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