Tomorrow's finance chiefs will need deeper business acumen balanced with core finance understanding gained from a broader finance and business career, says a new report from the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA).
Nearly 750 CFOs from across the world were surveyed for the Future Pathways to Financial Leadership report. Many of today's CFOs had taken classic finance career paths and the usual finance stepping-stones to the CFO role, but they suggest new experiences will be needed by tomorrow's CFOs to meet the changing needs of business. Consequently, the career experiences of most value will shift.
"We can expect a different premium to be placed on the capabilities that will really matter for future finance leaders," says Jamie Lyon, ACCA head of corporate sector and author of the report. "The survey suggests you can't get away from the need for retaining baseline finance skills, but there's so many more capabilities future CFOs will need to bring to the table too.”
"We already see this now with finance leadership roles today, but it's going to be more prominent in the future because the environment and business needs will demand it.”
Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research, said: "The finance construct in larger organisations is changing. With shared services, outsourcing and increasingly global business service models, traditional career routes through the finance organisation are being disrupted. In some respects they're much less obvious.”
Lawson adds that the current crop of finance leaders is adapting to the changing role of the CFO, which requires a broader, strategic approach to the business, and they can see that gaining those skills early on in the career journey will be a major benefit to the future CFOs.
The survey revealed that the 'classic' career path of current CFO was largely domestic in nature, but we are already seeing that changing with 27 percent of CFOs having spent any time in an international role, and 25 percent having worked in an emerging market.
The most popular stepping-stone to the CFO role was from financial controller.
Almost 50 percent had six or more finance roles within their career. While 40 percent of CFOs had taken a role outside the finance function in their careers, more may need to do so in future.
"If we fast forward 10 or 15 years we can see some significant factors shaping the business landscape; faster business change, rebalancing growth across markets, new finance function models, the proliferation of information and the advent of social, mobile and cloud technologies,” says Lyon.
These developments, Lyon explains, will impact how and where business is done and how the finance function operates. But also it means the capabilities that finance leaders need will evolve too, from being skilled in leadership in a change environment, being adept with technology, working successfully cross
culturally, as well as deeper understanding of the industry and sector, and so on.
"They're going to have to build all these leadership and business skills on that platform of finance expertise which means they will need different, broader career experiences which will help build those capabilities,” says Lyon.