Much more is being demanded of CFOs by their CEOs, according to the Southeast Asia CFO Survey, a new study commissioned by CPA Australia, Deloitte and Singapore Accountancy Commission (SAC).
Some six-in-10 CFOs surveyed say performance management, business support and strategy setting have become their top 3 focus areas.
The study also found that nearly 40% of CFOs polled said their CEOs expect them to shape and set the company’s strategy while executing it to deliver returns to shareholders.
“CFOs play a critical role in the stewardship of their organizations’ finances. Our latest CFO survey revealed findings that are consistent with our observations of the sentiments in the finance industry,” said Ng Jiak See, CFO Program Leader for Deloitte Southeast Asia and Singapore.
Almost all respondents believe that it is important for them and the finance team to be part of the strategic decision-making process, but only 70% of CFOs believe they are sufficiently or very prepared to successfully execute the strategy of their companies.
Traditional operator and steward roles
According to the poll, CFOs in Southeast Asia are still spending more than a quarter of their time in traditional operator and steward roles.
Forty-two percent of CFOs surveyed said that the finance function is involved in their organization’s strategic decision-making process at the initial stage of the project, while half of respondents indicated they are brought into the picture at some point along the way.
But for 7% of CFOs, the finance team is either brought in at the final stage of the process or only after the decision is made.
Even when the finance function is involved in strategy-setting, nearly half of CFOs said that the lack of effective communication from business units and adequacy of resources may impede their success in executing strategy.
“From our conversations with CFOs from small to medium-sized enterprises in Southeast Asia, we have observed that CFOs do not participate as frequently in business strategies as they would like to be, and are kept in the loop only when numbers are involved. Including CFOs in the planning process will ensure that business decisions made are aligned, financially sound and hence, result in a greater success during execution,” says Ng.
The challenge for CFOs
The strategy process, however, extensively depends on the context of the company and its business and leadership, the study said. The challenge for CFOs is to choose effective ways to engage in the process.
“Securing high-performing talent is also an important factor to the success of a CFO. Having an efficient team with strong finance capabilities can help CFOs free up more time to drive strategic initiatives. As we progress towards the future of finance, rapid advances in digital technology will also continue to reshape the role of CFOs, alter our economy and create new market opportunities for organizations. As strategists, CFOs will continually need to reorient themselves to stay ahead and drive their businesses forward,” says Ng.
“With increasing business complexity and disruption caused by emerging technologies, CFOs clearly need more than just technical qualifications to grow the Finance function and execute their companies’ strategy. They need to learn continuously to build new skills or enhance their existing ones to become active strategists and more effective business partners to their CEOs,” comments Melvin Yong, Singapore Country Head, CPA Australia.
“The Southeast Asia CFO Survey 2017 revealed encouraging findings that showed that almost all CFOs surveyed have acknowledged the need to be involved in their organization’s strategic decision-making process. It is therefore crucial to help CFOs and finance leaders deepen their skills to become business partners of CEOs.
“Given the fast pace of technology advancement and changing demographics, there is an urgency for CFOs to acquire the right skills and knowledge to better deploy assets and maintain a future-ready finance team that can help the business grow. This is one of SAC’s key focus areas as we develop Singapore into a leading global accountancy hub.”